Group 1: Small Cap Market Insights - The small cap trade is closely linked to Federal Reserve policy, with recent sell-offs attributed to uncertainty surrounding potential rate cuts [1][2] - Despite economic data visibility issues, small cap companies have shown strong earnings, making them more attractive compared to large caps [3][4] - There is a significant uptick in strategic M&A activity in the small cap space, which typically comes with higher prices, enhancing attractiveness for investors [4][5] Group 2: IPO Market and Valuations - The IPO market is expected to recover, with smaller IPOs likely to perform better than larger ones due to easier pricing dynamics [6][7] - The resurgence of the IPO market could lead to increased visibility for smaller companies, particularly in sectors like semiconductors and biotech [8][9] Group 3: Sector-Specific Opportunities - The defense and aerospace sectors are broadening, with potential growth driven by changes in defense budgets and geopolitical factors [9][10] - Consumer-facing companies are currently facing challenges, with aggressive opening plans not yielding expected rewards, indicating a need for more innovative approaches [11][12] Group 4: AI Integration in Small Caps - Small cap companies are increasingly leveraging AI technologies, with examples like RadNet and Digital Ocean demonstrating effective utilization of AI to enhance operational efficiency [13][14] - The integration of AI in smaller firms is seen as a way to compete with larger companies, emphasizing the importance of effective implementation and training [15] Group 5: Research and Investment Strategy - The investment approach has evolved, with a focus on building a backlog of ideas through more efficient research methods, such as virtual meetings [16][17] - Companies like Myrr are positioned to benefit from energy transmission needs, highlighting the intersection of energy and AI trends [19]

Market Outlook - A healthy bull market should experience profit-taking, suggesting a potential volatile phase is normal and could lead to a healthier market setup [2] - The current market situation is earnings-driven by profitable companies, differentiating it from past bubbles where earnings couldn't meet expectations [5] - Strategists suggest buying on dips and selling on strength, which is considered healthy behavior in a bull market [7] Investment Strategy - The firm recommends a barbell strategy, pairing large-cap growth stocks with small-cap stocks for Q4 [10] - Large-cap growth stocks have strong earnings momentum and should be bought on any weakness [8] - Small-cap stocks have been left behind but are showing an inflection out of an earnings growth recession, making them attractive [9][10] Economic Factors - The market's current performance is disconnected from GDP, focusing more on structural factors that are already priced in [7] - The expectation of Fed easing could be a macro catalyst for small-cap growth [10] - Tax tailwinds are offsetting tariff concerns, supporting earnings growth, especially for small-cap companies [12] - Small-cap companies are showing real earnings growth for the first time in more than eight quarters [13]

Uh the S&P 500 and NASDAQ hitting new highs uh this morning as the government shutdown is in its second day. Our next guest says the deadlock in Washington doesn't change his overall strategy, but he did make some moves uh for Q4, including lowering communication services to a market weight from overweight for the first time since 2023. Joining us now is Scott Croner, US equity strategist at City.Uh Scott, great to have you on here. So big picture, it feels as if I mean the constructive forces remain in pla ...

We're tracking ETF flows that are now over $855 billion year to date. We're also tracking the moves above and below the 30-day moving averages for the popular index funds, the SPY and the triple Q's buying, we're going to show you in a second, surged at the end of the week. This week, the Vanguard Growth Index Fund ETF ticker Bug that focuses on large cap stocks, saw the top inflows, followed by the Vanguard Small Cap Fund, ticker VB, and the the VBR, Vanguard Small Cap Value ETF.Of course, small caps hit a ...

As for the broader market, uh, Dow settled into the red early this morning. Bob Doll is with us. Crossmart global CEO and CIO.Bob, it's good to have you. Thanks for joining us in advance of the number tomorrow. We know this is I mean, we always say the jobs number is one of the most important ever, but this could actually determine the the trajectory of rates in the medium term, wouldn't you say.Totally agree. You guys just covered the job situation very well. Look, the Jackson Hole speech was a pivot.it wa ...

Market Trends & Drivers - Russell 2000 上涨超过 7% [1] - 市场上涨的主要驱动力是预期美联储降息和利率下调 [1] - 借贷成本正在下降，这对市场有利 [3] - 估值反映了小盘股的许多负面消息，任何利好消息都会带来更好的市场前景 [5] Small Cap Performance & Outlook - 投资者对小公司的信心正在增强 [2] - 行业预期到 2026 年小盘股的盈利增长将优于大盘股 [2] - 自解放日低点以来，高收益率下降了 150 个基点 (1.5%) [3] - 高收益利差已回落至 2007 年的水平 [3] - 小盘股中没有盈利的公司的比例为 30%，但权重约为 18%，且这一比例有所下降 [6] - 行业普遍认为，未来六个季度小盘股的盈利增长将开始改善，未盈利公司的拖累将减少 [7] Risk Assessment - 目前的风险偏好较高，高收益利差低于 300 个基点 (3%) [7][8]

Investment Opportunities and Risks - Small cap altcoins offer potentially high rewards but also carry significant risk [1] - The industry is interested in identifying promising low-capitalization cryptocurrencies ("gems") [1]

ETF Market Trends - Year-to-date net ETF inflows have topped $645 billion [1] - Active ETFs accounted for approximately 25% of flows in June, while passive ETFs accounted for 75%, indicating active ETFs are gaining ground [3] - Over the last 12 months, US equities have seen approximately five times the inflows of international equities, but in the last month, international equity has overtaken US equity [4] Investment Opportunities - Non-US investments have benefited from a tailwind due to the dollar, with a difference of around 10% between hedged and unhedged returns [7] - Small caps have not been favored in the US, but have performed well in non-US developed markets and emerging markets over the last five years [7][8] - American Century suggests considering international developed small cap strategies like ABDV and ABDS, with ABDV recently surpassing $10 billion in total assets under management [11] - Small cap companies with good valuations and profitability have historically been some of the best performers long term in US, non-US developed markets, and emerging markets [14] Market Outlook - Optimism surrounds potential trade deals, which is viewed as a positive factor [6] - Uncertainty in the current trade environment may create niche opportunities for small cap companies [15][16] - Diversification through exposure to smaller companies can provide opportunities often overlooked by large-cap focused strategies [13]

We want to move on to the ETF market. We're tracking ETF flows for the year that are now over $645 billion. We're also tracking the moves above and below the 30-day moving averages for the popular index funds, the spy and the triple Q's.So this week, we saw volumes trend below the 30-day moving average as the indexes hit record highs, the EyesShares US equity factor rotation ETF, ticker DYNF. That's all the top inflows this week. So take a look.This is an ETF that's actively managed, combining large cap, sm ...

Market Concerns & Risks - The inflation-adjusted PE ratio matches the peak of the dot-com bubble, indicating potential overvaluation [2] - The 10 largest cap companies are more expensive than during the dot-com bubble, suggesting caution in owning these stocks [2] - Historically high spread between 30-year mortgage rates and 10-year Treasury yields adds uncertainty [7] - Cyclically adjusted PE ratio (Shiller PE ratio) broke records, historically leading to poor S&P returns over 3-5 years [10][11] - S&P 500's momentum may reverse, hurting the largest cap stocks due to index selling [11][12] Investment Opportunities - Small-cap companies (around $10 billion) are attractive due to lack of liquidity and being undervalued [5] - Homebuilder stocks are attractive when sentiment is low due to anticipatory nature of the market [6] - Energy and healthcare sectors may offer better investment opportunities [4] - Companies punished for mistakes (e.g., Target, Merck) may present opportunities [5] Company Specifics - Smeed Capital Management sold Berkshire Hathaway due to premium associated with Buffett's involvement and its large-cap nature [9] - Thermo Fisher's earnings were better than feared, suggesting potential undervaluation in the healthcare space [8]