Russell 200 Index – US Jobs Report Could Signal a Good Week

The positive US jobs report might have lit a fuse under equity markets, the Russell 2000 index in particular.

Jobs Numbers Beat Forecasts

On Friday morning, the consensus among Wall Street analysts was that US firms would have added 675,000 new employees in March. The actual figure released as part of the Non-farm Payrolls report was a headline-grabbing 916,000 extra jobs.

Despite many markets being closed for the Easter holiday, stock futures in key global indices spiked in the good news. Within the last two weeks, the US Federal Reserve had pointed to low-interest rates remaining in place for the foreseeable future, even if employment levels picked up. Sensing a win-win, equity traders bought heavily into cyclical stock indices such as the Dow Jones Industrial Average and Russell 2000.

US Russell 2000 index – 5-minute price chart

Source: IG

In the 20 minutes following the Non-farm Payrolls report’s release, the Russell 2000 increased in value by 1.96%. The momentary spike above the 2300 price level didn’t hold, but price has continued to consolidate below that level. A further reason to suggest another surge could be on the way soon was the 5min moving averages also managing to catch up with price just before the US close.

The Russell 2000 has for a while been the index to watch. Its all-time high of 2367 on the 15^th of March, forming the latest milestone of its one-year and counting bull-run.

The index is now up more than 137% from its low on the 18^th of March 2020.

On the daily price chart, the moving averages are all pointing to further price rises. The 20 SMA at 2266 sitting above the 50 SMA at 2257, which is in turn above the 100 daily SMA at 2152.

US Russell 2000 index – Daily price chart

Source: IG

The long-term nature of the price surge means that the daily RSI is far from oversold. The monthly price chart RSI is printing above 70, but on two of the last three times that happened, price weakness was only a momentary blip.

US Russell 2000 index – Daily price chart

Source: IG

US Russell 2000 index – Monthly price chart – RSI

Source: IG

Recent comments from the US Federal reserve point to Jerome Powell and his team currently being comfortable with some sectors of the economy overheating. Their priority is to create a benign monetary environment so that the hard-to-reach sectors such as air travel and entertainment can begin to recover.

That is good news for stocks in the Russell 2000, which can be bought individually and via the index.

Source: CNN

Health Tech firm Alimera Sciences Inc is up 134% on a year-to-date basis, but most firms in the index are posting green rather than red YTD percentage returns, several in double-figures.

Alimera Fundamentals

Source: IG

Alimera would appeal to investors with a sense of adventure. The Georgia based company is yet to turn a profit but exemplifies the kind of growth stock the Russell 2000 index contains. It’s listed on the Nasdaq index under ticker ALIM.

If you want to know more about this topic, or have been scammed by a fraudulent broker, please contact us at [email protected]

Nigel Frith

Share

Tweet

Safest Forex Brokers 2024

	Broker	Info	Best In	Customer Satisfaction Score
#1	73% of retail CFD accounts lose money. Founded: 2014	Global Forex & CFD Broker	Best Trading Conditions Visit broker	4.9
#2	Your capital is at risk Founded: 2014	Global Forex Broker	BEST SPREADS Visit broker	4.8
#3	Your capital is at risk Founded: 2006	Globally regulated broker	BEST CUSTOMER SUPPORT Visit broker	4.9
#4	* 82% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money Founded: 2008	Global CFD Provider	Best Trading App Visit broker	5
#5	Between 74-89 % of retail investor accounts lose money when trading CFDs Founded: 2010	Global Forex Broker	Low minimum deposit Visit broker	4.9
#6	76% of CFD traders lose money Founded: 2007	Global CFD & FX Broker	ALL-INCLUSIVE TRADING PLATFORM Visit broker	4.9
#7	Your capital is at risk Founded: 2009, 2015 and 2017	Global Forex Broker	Low minimum deposit Visit broker	5
#8	Your capital is at risk Founded: 2006	CFD and Cryptocurrency Broker	CFD and Cryptocurrency Visit broker

Forex Fraud Certified Brokers

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.