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LIVE MARKETS-Small-cap tech vs large-cap tech: Little guys grab spotlight

Fri 20th November, 2020 2:10pm
* S&P 500, Dow, futures dip slightly; Nasdaq 100 futures ~flat * Markets juggle vaccine hopes vs new restriction concerns * Stoxx 600 posts modest rise * Dollar, gold edge lower; NYMEX crude up; US 10-yr yield ~0.83% Nov-20 - Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at SMALL-CAP TECH VS LARGE-CAP TECH: LITTLE GUYS GRAB SPOTLIGHT (0900 EST/1400 GMT) As small caps have stepped out of the shadows*:nL1N2HX191, large-cap tech shares have suddenly found their little brothers aren't so easy to push around anymore. (Click on chart below) Indeed, since peaking in late 2016, the Invesco S&P Small-Cap Tech ETF PSCT.O / Technology Select Sector SPDR Fund XLK.P ratio has been in a multi-year downtrend. This as a large-cap tech/FAANG mania took hold, which has Apple AAPL.O and Microsoft MSFT.O now accounting for nearly 12% of the S&P 500's .SPX total market cap, and nearly half of the XLK's exposure. That said, the trend of small-cap underperformance put in a low on September 1. With this, the PSCT - XLK spread had collapsed from $22.46 in late 2016, to minus $34.60 on Sept. 1. Since then, however, there has been a dramatic change. Both the ratio and the spread have advanced. In fact, both have reclaimed their 200-day moving averages (DMAs). This as the PSCT has rallied nearly 16% and the XLK has declined about 4%. If the ratio and spread can continue to rise toward the resistance lines from their late-2016, and late-2017, highs, it would suggest a much greater period of small-cap outperformance, and potential for the spread to flirt with positive territory. Falling back below the 200-DMAs can suggest stalled rises.*:nL1N2I51XN Among top holdings in the PSCT are Brooks Automation BRKS.O , Power integrations POWI.O and LivePerson LPSN.O . (Terence Gabriel) ***** FOR FRIDAY'S LIVE MARKETS' POSTS PRIOR TO 0900 EST/1400 GMT - CLICK HERE:*:nL1N2I60TM <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ PSCTXLK11202020 ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Terence Gabriel is a Reuters market analyst. The views expressed are his own)
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