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The Dow’s 1.6% Gain Hid Turmoil Beneath The Market’s Surface

FYI: 9This is a follow-up article.)

So that’s what Wile E. Coyote feels like after the Road Runner is through with him.

We’re not referring to the overall market, which had what appeared to be a rather calm, if only slightly productive, week. The Dow Jones Industrial Average gained 422.06 points, or 1.6%, to 27,219.52; the S&P 500 index rose 1%, to 3007.39; and the Nasdaq Composite advanced 0.9%, to 8176.71.

But those numbers entirely miss the point. It was a week when everything that had been working stopped working, when losers were suddenly winners. Value stocks, the market’s cheapest, had underperformed growth stocks by 14 percentage points since the start of 2018.

Pity those betting that recent trends would continue. This past week, value gained 2.4%, while growth dropped 0.5%. The battered small-cap Russell 2000, meanwhile, gained 4.9%. It was as if the meek had inherited the market.
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