Dow, S&P, Nasdaq, And Russell 2000 All Hit New Record Highs  Image: Bigstock Stocks closed higher on Friday, and higher for the week, with all of the major indexes hitting new all-time highs in the process.
While all of the indexes have been pretty impressive, the small-cap Russell 2000 index put in another spectacular outperformance.
The Russell 2000 was up 2.37% just on Friday alone. That's 3.3x the S&P's 0.70%.
And between November and the close on Friday, the S&P was up 13.1%, the Dow was up 14.0%, the Nasdaq was up 14.2%, while the Russell 2000 was up a whopping 23.0%!
Take note; we've been touting last month's upside breakout in the Russell 2000 because the breaking out of small-cap stocks has long been considered a powerful bullish signal. And their outperformance suggests even bigger moves ahead. That's exactly what we've been seeing. And exactly what I'm expecting to see more of.
I should also mention another bullish indicator, and that's an upside breakout in the transportation sector. It's typically used as a confirming indicator if the Dow and/or S&P are breaking out. And sure enough they all are with the Dow Jones Transportation Index making a new all-time high close last week.
Friday's Employment Situation Report showed more job gains, but came in under expectations with 245,000 new jobs vs. the consensus for 500,000. (That breaks down to 344K new jobs in the private sector and -99K in the public.) The unemployment rate, however, beat expectations coming in at 6.7% vs. last month's 6.9% and views for 6.8%. Although, the participation rate dipped to 61.5% from last month's 61.7% and estimates for 61.6%.
While the report was a bit disappointing, it shouldn't have come as too much of a surprise given the recent rise in coronavirus cases and the resulting restrictions that have hampered reopening plans and hiring.
Quite frankly, I think it was a fine report, all things considered.
Nonetheless, it was weaker than expected. But stocks rallied on the news. And that's because this was one of those times where 'bad' news is considered good. Because it clearly underscored the urgency of getting another stimulus bill done asap. And with job gains slowing, neither party wants to be the one to hold this stimulus up any longer.
And once that passes, that will help jump-start another wave of economic growth.
Then when you add in the vaccines, which will soon be available, that will usher in even more growth and be the catalyst for the world to finally begin getting back to normal.
All in all, the market is forward looking. And it's seeing continued improvement in the economy.
That's why stocks are soaring. And it looks like there's a lot more upside to go.
So make sure you're taking full advantage of it.
See you tomorrow, 
Kevin Matras Executive Vice President, Zacks Investment Research |
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