Institutional investors who dominate the stock market increasingly favor large-cap stocks as the end of year approaches — and therefore you should too. Many managers know they will receive a year-end bonus if they finish the year ahead of the S&P 500 (SPX) So if around this time of year they are ahead of that benchmark, they have a powerful incentive to start making their portfolios look increasingly like an S&P 500 index fund, thereby locking in their positive “alpha.” Since the S&P 500 is a cap-weighted index dominated by a couple dozen of the largest-cap stocks — including Apple (AAPL) Microsoft (MSFT) (MSFT) and Alphabet (GOOG) (GOOGL) — this means fund managers will more heavily weight those stocks and underweight small-cap stocks outside the index. Read More...
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Why Nio Shares Jumped Friday
Nio (NYSE: NIO) reported increasing losses in its second-quarter earnings report this week, but investors are shrugging that off, sending shares soaring Friday morning. Although its profit margins have been on a downward trend, new models being launched could turn that around in the coming years. Consumer prices in China increased at a slower pace than many expected in August, and producer inflation sank to the lowest level since February 2021, reports Reuters.
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