Week Ahead: Large Caps Fall, Small Caps Rise; Market Sending A Message?

Large caps ended a five-day rally; small caps posted sixth day pf gains Oil ended nine-day advance, longest in nine years General Motors (NYSE:) bucks soft guidance trend Sectors suggest confusion

The five-day rally of US large cap indices—the , and —came to a halt on Friday, though the small cap posted its sixth straight advance. Energy stocks tracked prices lower, ending nine days of gains, the longest winning streak for the sector in nine years.

The possibility of strength among automobile manufacturers, after an from General Motors (NYSE:) catapulted the stock higher on Friday, offered investors some hope after last quarter’s across-the-board softer guidance which extended into Apple’s recent announcement of an in the current quarter. However, mounting concerns over the now-longest government shutdown in history offset what investors may have considered a bottom for company outlooks.

No Logic to Friday’s S&P 500 Sector Advancers and Decliners

The S&P 500 Index slipped by 0.01 percent ahead of the weekend, with sectors split between red and green. However, there didn’t seem to be a logical delineation among the winners and losers.

shares led the losses (-0.59%). That makes sense since tumbled below $52 a barrel on Friday. Otherwise, there wasn’t the classic divergence between cyclical and defensive sectors.

For example, defensive sector was up (+0.29%) while fell (-0.37%). On the other side of the spectrum, cyclical sector was up (+0.25%), while (-0.5%) was down.

Another structural anomaly occurred between Financials (+0.25%) and (+0.19%), both of which gained almost equally. However, Financial shares tend to rise when the outlook for higher interest rate increases, while Real Estate stocks typically fall with higher borrowing costs and relatively lower property income relative to higher fixed income yields. In other words, the negative correlation between the two sectors broke down on Friday.

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