Malcolm Graham
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Small-cap stocks get tripped up, suggesting the broader stock market rally is in danger

The tax debate in Washington is heating up, so expect anxiousness among investors.

But don’t take your eye off the ball. Liquidity is free-flowing from central bank stimulus, and that’s good for people who expect the stock market rally to continue. Still, there’s been a very important shift: the willingness of investors to assume added degrees of risk has diminished.

Reasonably, with the S&P 500 Index SPX, +0.14% Dow Jones Industrial Average DJIA, +0.03%  and the Nasdaq 100 Index NDX, +0.40%  hitting all-time highs, it’s hard for some people to see the shift. If you invest in small-cap stocks, you see it very clearly. The Russell 2000 Index RUT, +0.18% has been extremely weak lately, and there’s a reason for that.

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