Yahoo Finance Small-Cap Russell 2000 Leads Monday Trading; ZM Beats
Market indices began the trading day — and week — in the green across the board, with the Dow slipping into the red early and staying there, the S&P 500 fighting to stay above it and the Nasdaq and the small-cap Russell 2000 continuing aloft through the closing bell. The Dow, which had been down -218 points at its session low, finished -140 points, -0.42%. The S&P barely stayed positive, +0.02% (closing a hair shy of 4200), while the Nasdaq gained +0.50% on the day. The Russell gained a healthy +1.22%.
Communications Services and Real Estate posted strong gains for the day, with otherwise a familiar narrative that outperforming mega-stocks — such as Apple AAPL and NVIDIA NVDA — continue to take the lion’s share of market growth. Apple, after starting 2023 at multi-year lows, is already +34% year to date, while NVIDIA, which reports quarterly numbers this week, is already up more than 110% from the start of the year. In a recent survey, nearly 80% of investors believe these leading mega-caps are carrying the rest of the market.
Of course, this doesn’t account for the Russell 2000’s outperformance today. Swinging to the positive for only the second time in the past month — and still well off the early February highs this year — the small-cap index is still making up ground from its larger-cap brethren. Over the past five years, the Russell is up +10%, while the Dow is +34%, the S&P +54% and the Nasdaq up a substantial +71%. Only the Dow and S&P are somewhat close to their multi-year — and all-time — highs.
Zoom Video ZM outperformed Q1 expectations this afternoon, posting earnings of $1.16 per share — above the 99 cents expected and the $1.03 per share reported in the year-ago quarter. Revenues of $1.11 billion surpassed the $1.08 billion in the Zacks consensus. Its important Enterprise business gained +13% year over year in the quarter (better than expected) with strong online revenue. Guidance was basically in-line for the current quarter, but the company has notched up expectations for the full year.
Tomorrow morning, we’ll see new economic reports for S&P flash Manufacturing and Services PMI for May, and New Home Sales for April. The previous month’s print showed PMI above 50 — the demarcation point between growth and loss — while home sales trends are decidedly downward, and are expected to continue in this vein. Earnings Tuesday brings us a variety of retailers — from Lowe’s LOW to Dick’s DKS to Williams-Sonoma WSM, along with enterprise network security firm Palo Alto Networks PANW.
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