With the second quarter nearly in the books, it may be a bit surprising about how calm market activity has been, at least in large caps. The S&P 500 is very quietly, up about 3% quarter to date (+16% YTD). Furthermore, the Index has not been all that volatile in terms of trading days that it has risen or fallen at least 1% (a volatile day), with just seven such occurrences (3 positive, 4 negative) in 60 trading days. During last year's second quarter, there were 14 volatile days, and the S&P was also up about 3%. Of course, with three days left in this quarter a lot can happen.
Meanwhile, we are also seeing a divergence between the performance of large and smaller caps, which grows wider the further you go down the market cap spectrum. Quarter to date, the Russell 2000 is down about 1% (+13.5% YTD), while the Russell Microcap Index has fallen about 2.6% (+10% YTD). The difference in performance has become noticeable, at least to those of us drawn toward smaller names, especially value oriented, or those that are more distressed. There's been a "flight to quality" of sorts happening, not between stocks and bonds, but between higher quality large caps, and lower quality small caps. It certainly bears watching, because it can get out of hand quickly if it continues.
Elsewhere, gold, somewhat quietly I might add, hit a six-year high and broke the $1400/oz. barrier for the first time since 2013. A beneficiary of the combination of "rate cut mania" as well as global uncertainty, the yellow metal is showing that it can still pack a punch. Many are expecting a short-term pullback, but longer-term I expect that the trend will be up in the face of our still growing $22 trillion national debt.
Interestingly, silver, which is languishing in the $15/oz. range, is not participating. In fact, the gold/silver ratio (the amount of silver it takes to buy 1 ounce of gold), which averaged 47 to 1 during the 20th century, and around 60 over the past 20 years, currently sits at 92. The ratio, which had historically been used as an indicator of when to buy silver, has lost some of its luster (pun intended) over the years among some pundits, but I still wonder whether we'll see some normalization nonetheless.
Last but not least, those pennies in your pocket, minted until 1982, are worth more than you might think. Comprised of 95% copper and 5% zinc, the metal in each is currently worth 1.8 cents, 80% more than face value. It is illegal to melt them, however, but as a store of value, that's not a bad return, if you can find/store enough of them.