EB Daily Market Report - Brief Update - Wednesday, August 13, 2025

Brief Market Update

We're seeing much of the same action today that we saw yesterday.  Small cap stocks (IWM, +1.40%) are paving the way higher, while their large cap counterparts, S&P 500 ($SPX, +0.20%) and NASDAQ 100 ($NDX, +0.03%), lag rather badly.  The 10-year treasury yield ($TNX) is down 5 basis points to 4.24% and that's adding strength to an already very strong home construction group ($DJUSHB, +4.82%).

Additionally, other interest rate sensitive areas are performing very well today.  Regional banks (KRE, +1.22%) and biotechs ($DJUSBT, +1.30%), two areas that I really like right now, are continuing recent strength with the latter moving to a new 4 1/2 month high today.  The SPDR S&P Biotech ETF (XBI, +2.62%) is performing even better than the DJUSBT.  Transports ($TRAN, +0.65%), another potential beneficiary of lower interest rates and a strengthening economy, are also up nicely.

August monthly options expire this Friday and that could be a contributing factor to the weaker SPX and NDX, although we could see this relationship continue if Wall Street keeps its focus on a lower interest rate environment ahead.

I was looking at the performance of our Strong Earnings ChartList (SECL) stocks a bit ago and realized that, of the Top 25 best performers today, only 2 had market caps over $10 billion, so we really could be seeing a shift to smaller companies - something I've been expecting for quite awhile.

Happy trading!

Tom