Chart of the Day - Thursday, April 16th, 2020

Today's Chart of the Day was shared on Twitter by Willie Delwiche (@WillieDelwiche). It's a ratio chart of Mega-Cap stocks ($OEX), relative to Small-Cap stocks ($SML). When the line is rising, it indicates that Mega-Cap stocks are outperforming Small-Cap stocks, and vice versa. As  Willie points out, this ratio reached a new high today. In other words, Small-Cap stocks are underperforming Mega-Cap stocks by the widest margin in decades. Small-Cap stocks tend to be risker and more aggressive than their Larger-Cap peers. Because of this, their relative performance is a good indicator of risk-appetite among market participants. New highs from this ratio do not favor the bull case for stocks right now. If anything, this is further evidence that stocks remain in a risk-off environment despite the sharp rebound in the broader market over the past few weeks.