Welcome to this week’s Market Wrap. A quick glance at the 1-month performance figures for some of the main western indices tells you all you need to know about general sentiment in recent weeks. The large-cap US S&P 500 is down 10% over the past month - with spiralling inflation being a key factor in all the unease. More on that shortly.

Index changes


This Week

1 Month

1 Year

FTSE 100

+1.9%

-3.0%

+5.6%

FTSE AIM All Share

+0.7%

-9.8%

-22.1%

S&P 500

-0.2%

-10.4%

-3.1%

FTSEuroFirst 300 (ex-UK)

+3.2%

-5.9%

-2.8%

S&P/ASX All Ordinaries

-0.7%

-6.0%

+1.4%

Source: Stockopedia, London Stock Exchange

Factors and markets

For individual investors, of course, small-cap performances are equally (if not more) meaningful than what the large-caps are doing. Alas, on this front the performance year-to-date has been dire. Small-cap indices across these territories are well underwater, with US and European indices in minus mid-teen territory.


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The UK’s AIM All Share is down by nearly 20% year to date (22% over a year) - making it a particularly difficult place to be for investors.

Out of 842 companies on AIM in April:

  • 25 were valued at more than £1 billion
  • 236 were valued at between £100m and £1 billion
  • 581 were valued at up to £100 million (of those, 323 were valued at less than £25 million)

As you can see, AIM is dominated by large numbers of companies with relatively small market caps (and many of those capitalisations have got a lot smaller in 2022). In good times, of course, these stocks can rerate strongly. But in down markets, they get clattered.

For the optimists, it could be here that some stocks have sold off too far. If inflation levels start to ease, some of the higher quality names (which haven’t been immune from the downward trend) could end up looking like bargains. But that’s very much territory for the brave - and things could get worse before that.

What has happened with AIM this year has really been an acceleration of a trend over many months towards investors becoming risk-off, with preferences shifting from Growth to Value. In the UK market that’s manifested itself in a strong move away from smaller, more speculative growth plays, exacerbated by rising inflation, which makes pre-profit companies harder to value.

Instead, attention has turned to more defensive large-caps elsewhere. This is partly why the FTSE 100 is still in positive territory. Those traditional stalwarts…

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