f you’re reading this, you are one of the lucky ones as computer systems around the world have been crippled. The culprit is a botched security update issued by CrowdStrike (CRWD) through Microsoft (MSFT) systems which has caused thousands (or even millions) of people to be greeted by the dreaded ‘blue screen of death’. Flights and mass transit systems worldwide have been ground to a halt leaving people temporarily stranded as CRWD looks to roll back the update.

After a lousy couple of days for US stocks, Asian and European stocks are closing out the week on a down note. Major Asian equity benchmarks were down between 0.2% for Japan to 2.0% for Hong Kong’s Hang Seng. The Japanese government lowered its 2024 growth forecast from 1.3% to 0.9% even as inflation has pushed rates higher. In Europe, the STOXX 600 declined 0.5% in early trading and is on pace to finish the week down more than 2%. The only major economic report of note in the region was UK Retail Sales, which came in much weaker than expected, falling by 1.2% versus forecasts for a decline of just 0.6%.

There are no economic reports to speak of in the US this morning, and futures are little changed after trading moderately lower overnight, so the main issue of discussion heading into the weekend will revolve around whether or not President Biden stays in the race, and if not, who will replace him.

In what has been a bifurcated year for the market, the five days ending Thursday have continued to be a two-tier system, except now in the other direction. Through yesterday’s close, the S&P 500 tracking ETF (SPY) was down 0.69% over the last week, but mid-caps were up over 1% while small and micro-cap stocks surged over 3%.

There used to be a segment on Sesame Street called, “One of These Things” where they would show four items with one not looking like the others. The one-year charts of the major indices based on market cap would be a perfect version of that game where micro-caps, small-caps, and mid-caps have all surged and broken out of sideways trading ranges in the last few days. Meanwhile, large-caps have pulled back after reaching record highs.

Even as US large-cap stocks have faltered over the last week, they’ve outperformed every other part of the world. As shown in the snapshot of regional ETFs below, European and Asian markets were down slightly more than the S&P 500 while emerging markets fared even worse with declines of over 2%.  It may not have been the best week for US stocks in what was an overdue pullback, but other parts of the world fared even worse as US small caps were the only global bright spot.

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