Two Groups of Stocks Are About to Send Crisis-Era Signals on the Economy
- Small caps, transportation shares tumble relative to S&P 500
- Prior dislocations have preceded broader market sell-offs
June 21: BofAML's Outlook for Small Caps
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The S&P 500 is at a record, but areas of the stock market with a reputation for economic prescience are sending warning signals that hearken to the global financial crisis.
It’s small caps and transportation stocks, whose performance has deteriorated at a much faster clip than other parts of the market. Relative to the S&P 500, each group is on the brink of hitting its lowest point since 2009. For investors, the decline is another example of the growth debate churning underneath the market’s surface.