An improved financial background and a few notable earnings reports helped send some of the major indices back to record highs on Thursday.
Initial jobless claims for the week ending January 30 came in at 779,000 – lower than expected and 33,000 fewer than the previous week’s demands, which were sharply revised down to 812,000.
“All in all, the signal from this week’s claims data is one of modest further improvement following the recent deterioration,” writes Barclays’ Michael Gapen and Pooja Sriram. “Trends in the initial requirements in early 2021 point to some improvement in the number of job separations in January, although this week’s readings will be reflected in February employment conditions given the time of the employment survey week (the week that includes the 12 . of the month). “
Also notable were factory orders, which improved by 1% month-over-month in December, exceeding expectations.
“We continue to value PYPL’s growth and positioning for a post-Covid world that accelerates global trends in e-commerce and the digitization of cash and payments,” writes Chris Kuiper, CFRA analyst, adding that “we are particularly interested in PYPL’s attacks with cryptocurrencies, which we believe could be a much bigger option. “
“However, equities continue to incorporate very high growth expectations and therefore we remain neutral.”
Interesting enough eBay (EBAY, + 5.3%), which PayPal split from in 2015, also had itself a day after robust holiday sales yielded an earnings target in Q4. These and other strong technological notions led Nasdaq Composite (+ 1.2% to 13.777) and S&P 500 (+ 1.1% to 3,871) to new final highs. That Dow Jones industrial average ended with a strong 1.1% gain to 31,055.
Second action in the stock market today:
- US crude oil futures continued their rise and ended as much as 1.0% higher at $ 56.23 per share. barrel.
- Gold futures tumbled 2.4% and settled at $ 1,791.20 per. ounce.
- Bitcoin prices at $ 37,068 on Wednesday rose 1.2% to $ 37,528. (Bitcoin trades 24 hours a day; the reported prices are here at 4pm every trading day.)
Small caps keep punching over their weight
But the stars of Thursday’s show – and 2021 for that matter – were small-cap stocks.
Russell 2000 also reached a new high, rising 2.0% to 2,202, increasing the index by 11.5% for the year to date. A few days ago we pointed it out January was tough for the wider market, but Bank of America reminds investors that Russell 2000 was the only segment to rise in January (+ 5.0%), and its analysts remain bullish for several reasons.
“Profits on small businesses need to jump back stronger than their decline, and guidance trends are strongest here in the three size segments,” they say, also pointing to stimulus, sentiment and support for smaller businesses as other catalysts for further gains.
Investors can take advantage of some of these effects in medium-sized shares, which boasts benefits such as more diversified revenue streams and better financial stability. But if you are willing to roll with the volatility punches, the little cap-room can throw, these 11 smaller companies could fit the bill.
Because of their size, they do not get as much media attention, so they fly under the radar of many investors, but they can boast of the potential for an electrifying year ahead.
Kyle Woodley was long Bitcoin at the time of writing.
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