Friday. Joining us this morning is bespoke co co-founder Paul Hickeyi to discuss. Paul, let's get the fall started.Good to have you. Um, talk about September season seasonality and whether or not there are elements that might make this particular round of September maybe a little less than feared. Yes.I mean, September, we all know it's historically a weak time of year uh for the markets overall. Uh, especially look at I mean what we've done the last four months. We're up 1% four months in a row.Um, you kno ...

Small Cap Characteristics & Performance - Small caps constitute approximately 10% of the United States market capitalization [1] - Historically, small caps have outperformed large caps by about 1.5% to 2% per year globally [3] - Small caps are currently trading at about 18 times forward earnings [6] Valuation & Investment Considerations - Small cap valuations are generally in line with their historical averages, offering a potential diversification benefit against high valuations in large cap growth companies [2][5] - Investors often express concerns about increasing valuations, particularly in US large cap companies [5] - A significant portion of small cap returns is driven by a small subset of stocks, making broad diversification crucial [8][9] ETF Strategies & Active Management - Flexibility is key in small cap investing, aiming to hold companies poised for higher expected returns [10] - Companies with high valuations, low profitability, and high balance sheet asset growth tend to underperform by 8% to 10% per year [11] - Some ETFs employ a rules-based approach with exclusions to avoid companies with lower expected returns, differentiating them from traditional index solutions [11][12]

ETF Market Overview - ETF net flows are over $789 billion year to date [1] - Investors are slightly buying the dip on the Triple Q's following Nvidia earnings [2] ETF Inflows - Vanguard Information Technology Index Fund (VGIT) saw the top inflows this week [2] - iShares Russell 2000 ETF (IWM), representing small caps, experienced significant inflows [2] - Investment grade corporate bond ETF (LQD) also saw substantial inflows [2] Active Management & JGRO ETF - JP Morgan suggests active management with the JGRO ETF, emphasizing bottoms-up research and individual stock valuation [3] - JGRO ETF focuses on large-cap growth, considered a suitable strategy in an environment driven by a few key stocks [3] - JGRO ETF is up double digits year to date, performing closely to the S&P 500 [4]

Joining me now is Craig Johnson, chief market technician at Piper Sandler. Craig, this is different from an earlier guest who was sticking with the bigger name. So, what convinces you exactly about the small caps.>> John, thanks for having me on this afternoon. What convinces me about these small and midcap names is when we go back and just sort of look at the advance we've seen off the lows and we start looking at these mag seven stocks that have just been kind of treading water in here. John, we've been c ...

Your next guest says a new record could be coming. Tim Orbanowitz is chief investment strategist at Innovator Capital Management. Tim, good to have you on set. >> Great to be with you, Brian. >> Man, we've been waiting for the small cap breakout for a long time. Hasn't It's happened a little bit, but we're still not at a record high. Should we be bullish? >> I think there are catalysts, Brian. And and if you look at this and take a step back, we we've had this valuation gap, small caps to large caps, for a ...

Nvidia's Market Impact - Nvidia accounts for approximately 8% of the SPY (S&P 500), around 10% of the NASDAQ 100, and over 22% of the SMH [1] - The market anticipates Nvidia to surpass both top and bottom-line expectations, with focus on their future guidance, particularly regarding China and data center growth [2] Market Broadening and Sector Rotation - The market has shown broadening, with previously underperforming sectors experiencing gains, such as healthcare [3] - Lower interest rates are expected to benefit sectors that have been under pressure, including small-cap companies [3] Liquidity and Investor Sentiment - Approximately $7 trillion is held in US money market funds, a rise from $4 trillion in recent years, suggesting potential capital inflow into big cap tech if Nvidia performs well [4] - BFA's flow show indicated that clients sold stocks in nine out of eleven sectors, led by tech, staples, and financials, with hedge funds being the largest equity sellers [5] Small Caps and Rate Cuts - Small caps are more highly leveraged than larger cap companies, making them particularly sensitive to interest rate changes [9] - Small caps could benefit significantly if a recession is avoided and a couple of rate cuts occur, as they are currently considered cheap [9] Investment Strategy - The company favors big cap tech overall, citing strong earnings power, and advises against reducing tech exposure before Nvidia's earnings [11]

Small caps outperforming the market after Fed chair Powell's dovish speech on Friday. The Russell 2000 also besting the S&P over the past month and the entire third quarter, too. So, is this the breakout investors have been waiting for in small caps.Let's bring in Jill Carrie Hall from Bank of America. Jill, does this have legs here or is it just based on hopes of a rate cut sooner than later. Right.That's the the big question investors have been asking and we had been cautious on small caps for a while. Bu ...

Never's a long time. Let me expand the conversation. We'll bring in Charles Schwab's Kevin Gordon.He's with us here at Post 9 and Truist Keith Learn is joining us as well. It's great to see you both. That's a good segue, Keith, to go to you because that is one of your principal picks, the small caps, which you upgraded.That's right. Well, great to be with you. I've been listening to the conversation.I actually agree with a lot of it. I mean, we we're still bullish on tech. We're still bullish on lab large c ...

Market Outlook & Strategy - RBC Capital Markets is cautious heading into the fall due to prior valuation ceilings and seasonal weakness [2] - The summer rally made sense, but current levels are bumping against prior valuation ceilings, especially for S&P 500 and NASDAQ 100 [1][2] - September has been down in the stock market for four of the last five years, and October has also been challenging [2] Rate Cut Impact & Sector Analysis - The market reacted to the possibility of a rate cut, but the extent to which it's fully priced in is debatable [3][4] - Small caps rose about 39% on Friday, driven by hedge fund rate cut bets and net short positioning [5] - Financials are favored due to the potential for a healthy economy with a few rate cuts, reasonable valuations, and strong tariff risk management [8] Sentiment & Market Dynamics - Market sentiment is mixed, with some seeing tech as oversold and others remaining nervous [15][16] - AI is sinking in August, with 14% more bears than bulls, a trend last seen in Q1 of this year [16] - Institutional hedge fund positioning is one standard deviation above the long-term average, signaling potential but not extreme risk [17][18] Key Stocks & Economic Factors - Nvidia's reporting is a significant sentiment indicator, representing 8% of the S&P 500 [10] - The tug-of-war between growth and value continues, with growth outperforming value and top 10 market cap names hitting new highs relative to the rest of the market [12] - Tariff-sensitive sectors saw margin forecasts decline for Q2 and Q3, while tech was the only sector with increased margin forecasts [14]

Market Expectations & Rate Cuts - Market anticipates potential rate cuts, influencing stock market trends [1] - Rate cut hopes drive market leadership, especially in economically cyclical sectors [2] - Two-year yield at 375%, suggesting a modest easing cycle is probable [8] - Market implies the Fed may implement a 25 basis points cut in September [9] Sector Rotation & Performance - Homebuilders, biotech, and small caps show signs of revival, indicating a rotation from mega-cap stocks [2] - Homebuilders began to show trend changes 3-4 months prior to the report [3] - Global autos, including Toyota and GM, demonstrate resilience despite challenging macro conditions [4] - Small cap industrials and healthcare sectors are performing strongly [7] Economic Outlook & Curve Steepening - A steeper yield curve suggests a positive economic outlook [7] - The economy is considered to be in decent hands [7] - Homebuilding stocks, previously in a bear market with declines of 40-50%, may be recovering [10]