$iShares Russell 2000(IWM.US), $Schwab US Div Eq(SCHD.US) basically didn't move today, with two completely different factor exposures yielding the same sideways result.
Small caps are more sensitive to interest rates, while the dividend side is supported by cash flow dividends. In a scenario where oil prices plummet while long-end rates remain unchanged, divergence should theoretically occur, but in reality, both lines are stagnant.
This synchronized lack of reaction typically occurs when capital hasn't decided which direction to shift yet. Next, we'll see if small caps can generate relative returns by leveraging the decline in energy costs; that would be the true signal for divergence to begin.
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