One day, itâs all about technology, the next day, back to commodities, and on the third, defensive plays like health care shine. Next week, we could see a new player lead the markets higher.
The Russell 2000 Index, which is chock-full of small-cap stocks, has been trading back and forth, but basically going nowhere over the last month. I detected a stirring of upside momentum this week and will be watching that index closely after the Memorial Day weekend for additional follow-through.
The small-cap universe, (one of my picks to outperform this year) has done âOKâ so far this year, outperforming the S&P 500 Index by about 3 percent. But, I expected more. After all, small-cap stocks are the ultimate reopening trade. They are the lifeblood of the U.S. economy, and should do especially well when the broad economy is growing at a substantial clip. The macroeconomic data indicates that is happening right now.
The economy is on really firm footing and it s not just the U.S. economy, it s the global economy, Kirby told CNBC s Trading Nation on Thursday. The economy is probably peaking or sort of at peak growth. … Europe is reopening, emerging markets are reopening. I think that there s a lot of economic momentum that supports continued risk asset prices.
Kirby highlighted three investment buckets that look favorable in this high economic growth environment. The first, value and cyclical stocks, should get a lift as the economy rebounds off its pandemic lows. The value-versus-growth debate that s been going on for a long time, we re pretty firmly in the camp for preferring value and cyclical, he said.