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July 24 (Bloomberg) -- Smaller U.S. companies are trailing larger ones badly enough to help explain why stock investors are increasingly pessimistic, according to Pierre Lapointe, a global macro strategist at Brockhouse & Cooper Inc.

The CHART OF THE DAY displays a ratio of the Standard & Poor’s 500 Equal-Weighted Index, which doesn’t take into account each company’s market value, to the S&P 500, which does.

The ratio peaked in May 2011 and has fallen 6.2 percent since then. Yesterday’s reading was the lowest since February 2010, which showed the equal-weighted index failed to keep up with a 22 percent gain for the S&P 500.

“Individual investors do not feel as rich” as the S&P 500’s performance would indicate, Lapointe and two colleagues wrote in a July 20 report. This would have given investors a reason for concern last week even though the index climbed to a two-month high, the report said.

Only 22.2 percent of the respondents were bullish in the latest weekly survey by the American Association of Individual Investors. The percentage, reflecting the outlook for the next six months, was the lowest since August 2010.

Consumers “starting to feel the pinch” of a slumping U.S. economy may have even more to do with the prevailing view, the Montreal-based strategist wrote. Growth slowed to a 1.4 percent annual rate last quarter from the 1.9 percent pace three months earlier, according to the average estimate of economists in a Bloomberg survey.

To contact the reporter on this story: David Wilson in New York at

To contact the editor responsible for this story: Chris Nagi at

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