The Dow’s record run to 30K is nothing compared to the rally in these small caps

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Buongiorno, Bull Sheeters. After yesterday’s record-breaking close, investors are pulling back slightly. Stocks in Europe and Asia have been retreating much of the morning, as have U.S. futures.

But that’s not to take anything away from this November-to-remember. The push into value stocks has propelled the Dow and Russell 2000 to all-time highs, with volumes that suggest the rally has plenty of legs. Bitcoin too is on the brink of hitting its own milestone: $20K.

Let’s check in on the action.

Markets update


  • The major Asia indexes are mixed in afternoon trading with Japan’s Nikkei the best of the bunch, up 0.45%.
  • Shares in HSBC soared as much as 8% in Hong Kong on Wednesday after it landed a “buy” rating from Goldman Sachs on speculation it will resume paying dividends, another sign its turnaround strategy is progressing.
  • JD Health International, a unit of the Chinese e-commerce giant, is looking to raise $3.5 billion in an IPO, the biggest listing ever for a Chinese health care firm.


  • The European bourses were up modestly, with the Europe Stoxx 600 0.2% higher at the open, before dropping in the red.
  • Shares in Boeing closed 3.3% higher on Tuesday after the EU Aviation Safety Agency—the FAA of Europe—signaled it too is close to giving the green light to the long-grounded 737 Max.
  • Things still look grim for the commercial airlines sector, however. Trade group IATA yesterday revised down its 2020-21 forecast, saying the world’s carriers will lose $157 billion this year and next.


  • U.S. futures are off their highs this morning. On Tuesday, the three major indexes finished in the green with the Dow Jones Industrial Average securing a historic all-time high.
  • As good as the Dow’s performance has been of late, it’s nothing compared to the bull run in small caps. The Russell 2000 closed up 1.9% yesterday, extending its amazing November.
  • FX traders are cheering the prospect of Janet Yellen as the next U.S. Treasury secretary. She’s widely seen as a steady hand for global trade, and for the currencies market. Still, don’t bet on the greenback in 2021.


  • Gold is flat, trading just above $1,800/ounce.
  • The dollar is up a tick.
  • Crude continues to gain ground with Brent trading above $48/barrel, its highest price since March.
  • Bitcoin topped $19,300 at one point yesterday, before slipping. It’s up more than 40% in November alone.


By the numbers

Note: Bull Sheet will be off tomorrow and Friday for the Thanksgiving break. As such, I’m doing a special Wednesday edition of “By the numbers.” Here goes:


In the very first Bull Sheet newsletter, back in January, I noted how we were on the cusp of Dow 30K. You may recall that I asked for your predictions on when we’d hit that milestone, and many of you figured it was mere days away. And then COVID crashed into those plans, and you know the rest of the story… Well, we finally made it yesterday. (I need to go through my emails to see whose Dow 30K guess came closest; I’ll report back on that in an upcoming Bull Sheet.) Here are a few amazing data points behind this achievement. The blue chip index is up 62% since its March low, and it’s on track to record its best month since 1987. And volume has been brisk, with 26 billion shares trading hands over the past two days. Perhaps that’s understandable when nobody’s traveling. Looking back, we first hit Dow 20,000 just three years ago, in 2017. And Dow 10K? That happened in 1999. It took 19 years to go from 10,000 to 20,000, and just under four years to go from 20,000 to 30,000. So, who has a guess for Dow 40K?


If, at the close of trade on March 18, you had put 10,000 bucks into a small cap ETF tied to the Russell 2000, you’d be looking at a return (minus dividends) of $18,700 this morning. (I know. Eighteen grand is tipping money for Bull Sheeters.) Yes, the Russell 2000 is having a bull run for the ages, up 87% since its March nadir. It’s up 20% this month alone as investors pile into value stocks, anticipating a vaccine-spurred recovery in the months ahead. The Russell 2000 gets somewhat overlooked, and that’s a mistake. It often presages big moves in the wider markets, including corrections and bull market rallies.


You know who’s having a better month than small cap investors? No, not Team Biden. But good guess…Answer: Bitcoin bulls. The crypto currency is up 40% in November alone—or it was when it hit $19,359.48 overnight. The rush into crypto is giving traders a flashback to November 2017. A reminder: that bubble popped a few months later. You know what else is on the rise? The volume of press releases I’m getting from Bitcoin PRs who all say the same thing: this time it will be different. I wish I got a Bitcoin for every time I’ve heard that one over the years.



My first Thanksgiving in Italy was a snowy, smallish affair in Amandola 15 years ago. A week prior, I had called Mario, the local butcher, to check in about getting a turkey, an order that he found both baffling and troubling.

He could get one, no problem. What confounded him was that we’d chosen to celebrate such a special occasion with, of all dishes, turkey. Italians regard il tacchino (the turkey) as, well, a turkey. (They also think corn is little more than animal feed, fit only for pigs and other barnyard creatures.)

Mario tried to convince me that a veal roast would be more of a crowd-pleaser. When I pushed back, he suggested lamb. Nope. Cinghiale (wild boar)? No, the tradition is turkey, I emphasized.

He backed down, and I figured the matter was closed. That is until I got to town to pick up the bird and run some errands. Word had traveled around Amandola that the americano was here to celebrate Thanksgiving. The green grocer, Piera at the bank, the exhausted husband and wife duo that run the forno (bakery), all wished me a “Buon ringraziamento,” and then asked me some version of the same question: are you really going to be serving turkey?

The Italians who broke bread with us on that first Amandola Thanksgiving dinner had a lovely time, but each had suggestions for all future Thanksgiving meals—starting with the menu. As a super power, my wife explained, you really outght to find a more fitting beast to pop in the oven, and serve to friends and family.

And that’s when I embarked on my mission to prove the whole country wrong—that roast turkey ain’t no turkey, so to speak.

My wife and I started by poring through old Italian recipe books, and taking notes. (In one pre-war cook book I found in my mother-in-law’s kitchen, the turkey recipes came just ahead of the turtle soup recipes.) My wife, I should say, is a phenomenally creative cook who has a knack for reverse engineering recipes from a single bite of food. She too had some ideas about how to boost our bird. We combined all this data into a single recipe and then experimented in the kitchen.

In the end, we hit upon the key ingredients for a terrific turkey. They are: chestnuts, cognac and pig. The trinity, if you will. Here’s the recipe, if you’re interested. Another tip we learned from our Roman butcher, Federico: insist on a female bird. The males don’t cut it. You can taste the difference, he assured. I think he’s right.

So, what do the Italians think of our tacchino alla romana?

To say they’re crazy for it is a bit of an understatement. Thanksgiving meals at casa Warner have become grand affairs in recent years. We’ve had several dozen Italians—my kids’ classmates, friends, neighbors; someone even brought a monkey one year (it was not the worst-behaved primate that afternoon)—cram into our apartment on a late November Saturday afternoon to celebrate. Somebody always shows up with an uninvited guest, saying something to the effect: I had to bring her. She just doesn’t believe turkey can be this good.

Alas, this year our Thanksgiving will be a modest affair. Local lockdown measures mean we can’t invite over quite so many people. But I have all the ingredients—starting with the chestnuts, cognac, and plenty of pancetta.

Happy Thanksgiving, everyone! Buon Ringraziamento!


For those of you who are off, have a nice long weekend, everyone. Bull Sheet will be back on Monday. My colleague Rey Mashayekhi will take the keys. I’m off for a week’s break.

As always, there’s more news below.

Bernhard Warner

As always, you can write to or reply to this email with suggestions and feedback.

Today's read

The Dow, today and now. The blue chip index, as we know it today, dates back to the 19th century. It started with a mere 12 stocks, all big industrials. Names like American Sugar, U.S. Steel and American Tobacco were the big names in the early years. The Wall Street Journal has published a wonderful illustrative history of the Dow Jones Industrial Average, and how we got from triple digits to 30K. 

The social butterfly effect. This one is not markets related, but it's as timely as ever. MIT researchers have found that a prolonged lack of human contact triggers the same kind of neurological effect as food deprivation. As my colleague Katherine Dunn points out, no, you're not going crazy if you find the thought of locking down and staying away from friends and family fills you with dread. For most of us, our minds and our bodies just aren't built for that kind of separation

Some of these stories require a subscription to access. There is a discount offer for our loyal readers if you use this link to sign up. Thank you for supporting our journalism.

Market candy

Quote of the day

Policy should focus on smaller firms.

That's the advice three researchers—Robin Greenwood of the Harvard Business School, Benjamin Iverson of Brigham Young University’s Marriott School of Business, and David Thesmar of the MIT Sloan School of Management—have for the incoming Biden Administration as America's Main Street braces for a wave of small-business bankruptcies in 2021. As Fortune's Geoff Colvin explains, if there's a crush of business failures in the year ahead, as is largely expected, the repercussions will be felt across the country. 

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