Home » Small Cap Stocks (May 2 2022): index has lost 3.41% in the last week
The Small Cap Rusle 2000 index saw a rise as the new week started. However, the index could not hold the gains and go into losses later. As a result, the index has lost 3.41% in the last week.
The recent risk aversion amid the embargo on Russian energy imports has weighed on the stocks. Last weeek, a news broke that Russia halted the gas supply to Bulgaria and Poland as they failed to pay the companies in the Russian ruble. Moreover, Germany has reiterated the need to embargo the Russian oil import and look for an alternative.
On the other hand, the COVID spread in China is escalating with the death toll rising. The country has imposed the restrictions, resulting in a fear that the global economy will see a slowdown. Similarly, stocks worldwide have been falling due to the spreading fear of recession.
The US GDP showed a contraction of 1.4% in the last week’s data. This is another indicator depicting an upcoming recession in the world. Meanwhile, the Fed has reinforced its aggressive rate hike and balance sheet reduction plan. The FOMC meeting on Wednesday is likely to impost a 50-bps rate hike, resulting in a potential meltdown of stocks.
Small Cap Russel 2000 technical analysis:
The Smal Cap 2000 index saw a surge in Thursday last week. However, the index shed off all the gains on Friday. Today, the index attempted to recover again but failed badly, and it looks like the index will form a bearish pin bar candle pattern. Such a pattern indicates further deeper correction.