Market Report – February 13, 2012
In the Rear View Mirror:
It was another day at Greece’s office as the country’s reluctance to embrace austerity and finalize a bailout package with European policymakers to skirt sovereign debt default sent U.S. stocks tumbling on Friday. When the closing bell finally sounded, U.S. equities had suffered their worst one-day performance of 2012. The Dow Jones Industrial Average closed lower by close to 90 points, but it could have been much worse than that as the blue chip index traded lower by 30-50 points earlier in the session.
The S&P 500 and Nasdaq also suffered losses on Friday, but those two indexes were close to even for the week…down 0.17% and 0.06% respectively. Same goes for gold which slid close to 1% for the week. We’re fans of the old investing adage “Nothing moves up in a straight line” and that is worth remembering because Friday’s glum action has cast a pall of skittishness over the market and has plenty of investors wondering if the path of least resistance is suddenly lower.
With riskier assets being repudiated late in the week, the the iShares Russell 2000 Index Fund (NYSE: IWM) and the iShares S&P SmallCap 600 Index Fund (NYSE: IJR) were both down by more than 1.5% on the week, but factor in last week’s impressive gains and those two funds are still in the green over the past two weeks. The PowerShares Zacks Micro Cap ETF (NYSE: PZI) and the iShares Russell Microcap Index Fund (NYSE: IWC) both were down about 2% for the week as investors shied away from small-caps and micro-caps late in the week.
| The Markets @ 2/10/2012 | |||||
| Index | Close | Weekly | % Change | YTD Change | YTD% |
| DJIA | 12801.23 | -61 | -0.47% | 583.67 | 4.78% |
| NASDAQ | 2903.88 | -1.78 | -0.06% | 298.73 | 11.47% |
| S&P 500 | 1342.64 | -2.26 | -0.17% | 85.04 | 6.76% |
| NYSE Comp | 7992.03 | -68.4 | -0.85% | 515 | 6.89% |
| NYSE Amex | 2417.99 | 0.18 | 0.01% | 139.65 | 6.13% |
| RUS 2000 | 813.33 | -17.78 | -2.14% | 72.41 | 9.77% |
| VANG INTL | 14.31 | -0.18 | -1.24% | 1.25 | 9.57% |
| USX CHINA | 5132.79 | -97.18 | -1.86% | 602.99 | 13.31% |
| EMERG MKTS | 6871.74 | -67.59 | -0.97% | 866.43 | 14.43% |
Market Report
It’s like a boring record being played over and over again, but as long as Europe cannot advance substantive austerity measures for Greece and any of the other debt-laden problem children in the Euro Zone, riskier assets will suffer. Even gold, a traditional safe haven, has seen its near-term fortunes linked intimately to how good or bad the news out of Greece is.
The silver lining is two-fold.
First, the market has already shown investors that it wants to grind higher and that it wants to do so led by higher beta sectors and asset classes such as small-caps and micro-caps.
Second, assuming that risk appetite is merely taking a breather not an extended sabbatical, the buying opportunities among micro-caps are plentiful right now, particularly when looking at mining, materials, emerging markets and technology issues.
On a broader basis, the NYSE Amex was the only index we follow that finished on the plus side this week…up a whopping + 0.01% to close at 2417.99; everything else, across the board was showing red numbers.
Nasdaq is still leading the majors, up 11.47% YTD.
However, the Russell 2000, our small cap indicator gave back 2.14%, closing at 813.33…still up 9.77% for the year, but moving in the wrong direction. Emerging Markets, China and the Internationals all finished lower for the week…down 0.97%, 1.86% and 1.24% respectively.
Gold obviously didn’t like the news this week, closing Friday at $1,723.30…off $14.60. Crude oil continued to move up… +$0.83, to close at $98.67.
The dollar moved south (-0.0023 or 0.7577 Euros); the 10-year bond gained $0.059 to close at $100.125 and the 30-year bond lost $0.406 to close the week at $99.688. That is a mixed bag of market results if ever we saw one.
The Bottom Line for Stocks
Last week it looked like a good time to avoid conservative sectors, but following Friday’s action and subsequent spike in the Volatility Index (VIX), it wouldn’t hurt to take a look at some of the more conservative opportunities out there for a small position or two if you have singled out some stocks that strike your fancy.
However, our focus is on the microcap sector and there are plenty of micro-caps being ignored, going unloved and under-appreciated and market pullbacks are exactly the time to be considering these stocks. One name we like…and it has recently pulled back to the $1.00 range is SAVEDAILY, INC. (OTCBB: SAVY).
“SaveDaily has a singular focus… to bring Wall Street caliber investment opportunities to the Main Street saver.”
—Harry S. Dent Jr., World Economist, Best Selling Author and Chairman of the Board.
SaveDaily, Inc. was founded to provide people of all income levels the information and tools necessary to invest and self manage their short and long term savings goals. We covered the company extensively in an earlier report…click on the following link to review that analysis: http://gator3112.temp.domains/~jmcasson/2011/10/17/savedaily-inc-otcbb-savy/
We will continue to highlight selected names we like on Micro Cap Marketplace in the coming days. Stay tuned for some unique profit opportunities you’ll only find here.
Research and Editorial Staff
MicroCap MarkePlace
