Dear Fellow Expat:
The jobs report tomorrow created a rotation of capital today. While the S&P 500 is still soft, there is improvement in cyclical, while the Russell 2000 and homebuilders are looking much stronger. Investors have sought a breakout among smaller-cap stocks for the last few weeks.
Two things are bullish for small-caps aside from the valuation standpoint. First, rate cuts are cutting, which will benefit U.S. industry and business at a time when they’re needed. Second, smaller cap stocks will benefit from policy expectations from either Harris or Trump.
We are closing the weekend with concerns about Iran and Israel in mind. But we also must note that in addition to the post-election sentiment, we anticipate a bit of a positive drift heading into the Fed meeting next week. According to the market's behavior, the two biggest concerns around next week have abated on the jobs and inflation report. Now we just have to get through Tuesday as sane people.
Stay positive,
Garrett Ba…
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