Group 1: Investment Outlook - The core viewpoint of the report is that AI-driven innovations will continue to support investor optimism, with small-cap stocks expected to grow, and emerging market equities likely to outperform the overall market by 2026 [1] - The "Seven Giants" in the US stock market are expanding their market share due to strong core businesses and strategic reinvestments, which may lay a foundation for future growth [1] - Emerging market stocks are currently trading at a forward P/E ratio approximately 40% lower than US stocks, which is below the long-term average, indicating potential for narrowing this discount due to robust earnings [1] Group 2: Fixed Income Market - Investors need to assess recent macro signals, rising uncertainty regarding US fiscal stability, and the growth prospects of large capital expenditures in the AI sector as they approach 2026 [2] - The main challenge for investors lies in interpreting the intertwined signals, but opportunities still exist for fixed income investors who can actively manage their allocations [2] - Investment opportunities are expected to arise from AI and digitalization, energy production and transmission, changes in global trade patterns, and upgrades to aging infrastructure, particularly in mid-sized markets [2]

Core Viewpoint - The Federal Reserve has initiated its fifth interest rate cut since September 2024, leading to a resurgence in small-cap stocks in the U.S. equity market, particularly the Russell 2000 index, which has been rising since April 2023 due to expectations of lower interest rates [1] Group 1: Company Overview - The company, 第壹仁汇 (NIVF), has a market capitalization of approximately $134,000, which is significantly lower than its cash assets totaling around $703,670 [2] - The company has been in a state of loss since 2023, primarily due to its previous focus on medical services, a sector where many peers have not yet achieved profitability [2][3] - Despite the losses, the company has been diversifying its business, including acquiring MicroSort laboratory services and entering real estate development in the UAE [2][3] Group 2: Financial Projections - Zacks has initiated coverage on NIVF with a target price of $15 per share, while the current share price is only $1.81, indicating a significant undervaluation [1] - The company is expected to achieve profitability by 2026, with projected net profits of $18.6 million, $74.1 million, and $139 million for the years 2026, 2027, and 2028, respectively [9] - The projected earnings per share for NIVF are expected to rise significantly from $1.59 in 2026 to $11.87 by 2028, compared to its current share price of less than $1 [9] Group 3: Business Diversification - The company is expanding into real estate, having acquired a prime land parcel in Ras Al Khaimah, UAE, for high-end residential development, which is expected to generate substantial revenue [10] - The real estate project is projected to have total sales exceeding $450 million, with a net profit of around $200 million, indicating a strong growth potential for the company [9][10] - The company is also exploring digital asset management through tokenization of real estate and art, positioning itself in the burgeoning RWA (Real World Asset) market, which is projected to exceed $10 trillion by 2030 [12][15]

- The report covers the period from October 27, 2025, to October 31, 2025[2][11] - The market sentiment remains high, with a potential shift towards small-cap stocks due to valuation pressures and performance verification issues in large-cap growth stocks[3][11] - Market style trends indicate a preference for small-cap and value stocks, with decreased volatility in both large-cap vs. small-cap and value vs. growth styles[12][14] - Market structure shows an increase in industry excess return dispersion, a decrease in industry rotation speed, and a decline in the proportion of rising constituent stocks[12][14] - Trading concentration has decreased, with the top 100 stocks' trading volume share declining and the top 5 industries' trading volume share remaining stable[12][14] - Market activity has seen an increase in volatility and mixed performance in turnover rates[13][14] - Commodity market trends show an increase in trend strength for non-ferrous metals and energy chemicals, a decrease in basis momentum across all sectors, and an increase in volatility except for agricultural products[26][33] - Option market analysis indicates stable implied volatility levels for SSE 50 and CSI 1000, with an increase in put option skewness and a decrease in call option skewness for CSI 1000, suggesting heightened risk hedging by market participants[37][38] - Convertible bond market shows a slight recovery, with stable and rising premium rates for bonds convertible at par and a rebound in the proportion of low premium convertible bonds[39][41]

Core Insights - The Russell 2000 index, representing small-cap stocks, is nearing the year-to-date gains of the S&P 500 index, positioning it as a potential unexpected winner in a volatile market [1] - As of 2025, the Russell 2000 has increased by 12.02%, while the S&P 500 has risen by 14.77% [1] Performance Comparison - Small-cap stocks have historically struggled to outperform large-cap stocks, with the Russell 2000 showing a cumulative increase of only 110.11% since December 31, 2013, compared to the S&P 500's 259.7% [4] - In 2020, the Russell 2000 rose by 18.4%, outperforming the S&P 500's 16.3%, but has not matched this performance in subsequent years [4] Profitability Trends - A significant portion of the Russell 2000 consists of companies with unstable or no earnings, with 43% of its constituents not profitable [4] - Year-to-date, unprofitable small-cap stocks have surged by 55%, while profitable ones have only increased by 8% [4] - From the market low on April 8, unprofitable small-cap stocks have seen a staggering 108% increase [4] Market Dynamics - The S&P SmallCap 600 index has only risen by 3.71% year-to-date, indicating a divergence in performance among small-cap indices [5] - Small companies are more reliant on floating-rate debt, benefiting from interest rate cuts, which can enhance their profitability [7] - The growth of private capital is leading to a reevaluation of small-cap investments, with many high-potential companies opting to remain private rather than go public [7] Investor Sentiment - Despite challenges, there remains a strong belief in small-cap stocks as a "perennial asset class" among certain investment firms [7] - Interest in small-cap stocks is not limited to the U.S., as investors are also focusing on undervalued small-cap stocks in European and Asian markets [8]

Core Insights - Kyle Wool has become a key figure in managing the wealth of the Trump family, particularly through his investment bank Dominari Holdings, which has facilitated over $500 million in gains in small-cap stocks and cryptocurrencies since Trump's return to the White House [1][4] - The Trump family's business activities have intensified during Trump's second presidential term, with significant investments made by Eric Trump in American Bitcoin, valued at nearly $500 million as of October 9 [1][6] - The collaboration between Wool and the Trump family raises concerns about potential conflicts of interest, as Trump's policy decisions could directly impact the value of the companies involved [1][7] Investment Banking and Small-Cap Stocks - Kyle Wool transitioned from wealth management roles at firms like Oppenheimer & Co. and Morgan Stanley to become the president of Revere Securities LLC, which he rebranded as Dominari Holdings [2] - Dominari Holdings specializes in financing small-cap stocks, typically valued under $250 million, which are known for their volatility [2] - The close relationship between Wool and the Trump family has been leveraged to enhance the visibility and stock performance of companies like Unusual Machines, which saw its stock price triple after Donald Trump Jr. became an advisor [2][3] Cryptocurrency Investments - The Trump sons have achieved significant returns in the cryptocurrency sector, particularly through their investment in American Bitcoin Corp., where they acquired a 20% stake [4][5] - This investment has resulted in a holding valued at over $150 million for Dominari and nearly $450 million for Eric Trump as of October 9, despite Eric not contributing cash or assets to the company [6] Conflict of Interest Concerns - The investments made by the Trump family have raised serious concerns regarding conflicts of interest, as their financial interests could be influenced by government policy decisions [7] - Specific actions taken by the Trump administration, such as promoting domestic drone production and potential tax changes for cryptocurrency mining, could directly benefit the companies associated with the Trump family [7]

Group 1 - The small-cap stock bubble is raising alarms as they have outperformed large-cap stocks in Q3 2025, driven by a rally in technology stocks [1][2] - The Russell 2000 index has seen a gain of over 10% as of September 29, 2025, surpassing the S&P 500's approximately 7% increase [2][4] - Small-cap stocks have historically performed best during periods of Federal Reserve easing and economic recovery, but their recent performance contrasts sharply with earlier in the year [4] Group 2 - The technology sector, particularly semiconductors, has led the recent surge in small-cap stocks, with notable performers like Astera and Credo seeing gains of over 100% and 60% respectively in Q3 [5][10] - Despite the strong performance, concerns arise as the rebound is driven by a limited number of growth and tech stocks, leading to questions about overall value [11] - The forward P/E ratio for the iShares Russell 2000 ETF has reached 24.64, indicating that small-cap stocks may no longer offer the value they once did [11][12] Group 3 - The iShares Russell 2000 Growth ETF has an alarming forward P/E ratio of 36.38, suggesting a bubble similar to large-cap tech stocks [12] - Some small-cap stocks, like Oklo, have seen significant price increases without generating any revenue, raising further concerns about valuation sustainability [12] - Defensive sectors such as consumer staples and healthcare are recommended for small-cap investments, as cyclical sectors may struggle without substantial interest rate cuts [14]

Core Insights - Small-cap U.S. stocks are showing signs of a potential comeback after a prolonged period of underperformance, although it remains uncertain if this is the beginning of a sustained rally or a temporary rise [1] Performance Overview - The iShares Russell 2000 index has increased by 11% over the past three months as of September 25, 2025, compared to a 7.6% gain in the S&P 500. However, year-to-date performance shows the iShares Russell 2000 ETF (IWM) up 8.2%, lagging behind the SPDR S&P 500 ETF Trust (SPY) which is up 12.6% [2] - The early-year weakness in small-cap stocks was largely attributed to President Trump's announcement of higher tariffs in April, which adversely affected smaller companies [2] Economic Factors - The Federal Reserve's decision to cut interest rates by 25 basis points in September and the indication of two more cuts this year could benefit small-cap stocks, with an 87.7% probability of another 25-bp cut in October [3] - The U.S. economy experienced a robust growth rate of 3.8% in Q2 of 2025, driven by stronger consumer spending, marking an upward revision from a previous estimate of 3.3% [4] - The positive economic growth is favorable for small-cap stocks, which are closely tied to the domestic economy [5] Valuation Metrics - As of September 19, 2025, the Russell 2000 is trading at a P/E ratio of 34.65, significantly higher than the year-ago level of 25.12, indicating that small caps may be overvalued [6] - In comparison, the Nasdaq 100 is trading at a P/E ratio of 32.65, and the S&P 500 at 25.30, suggesting that small-cap stocks are not cheap relative to other indices [7] ETF Performance - Notable small-cap U.S. ETFs that have performed well in Q3 include: - Fidelity Enhanced Small Cap ETF (FESM) – up 15.5% - Invesco S&P SmallCap 600 Pure Value ETF (RZV) – up 14% - Vanguard Russell 2000 Value ETF (VTWV) – up 13.6% - First Trust Small Cap Core AlphaDEX ETF (FYX) – up 13.5% - Janus Henderson Small Cap Growth Alpha ETF (JSML) – up 13.4% - iShares Russell 2000 Growth ETF (IWO) – up 13% [8] Market Concerns - President Trump's announcement on September 25, 2025, regarding new tariffs on various imports starting October 1 may introduce volatility in small-cap stocks in the short term [9]

Group 1 - The trend of large-cap stocks becoming bull stocks is significantly influencing investors' stock selection strategies, shifting focus from speculative trading to performance and growth metrics [1][2] - The market preference is changing, with a growing emphasis on companies with strong industry barriers, stable cash flows, and robust risk resistance, which resonate with both institutional and retail investors [1][2] - The structure of market participants is evolving, with long-term funds like pensions and insurance capital entering the market, favoring predictable performance and solid value investment targets [1][2] Group 2 - Large-cap stocks are not a necessary condition for becoming bull stocks, but their probability of doing so has increased, indicating a shift in market dynamics [2] - Investors should not adopt a mindset of exclusively buying large-cap stocks; quality companies with strong performance and growth potential should be prioritized regardless of market capitalization [2] - The valuation levels of large-cap stocks are generally higher than those of small-cap stocks, but small-cap stocks can showcase growth potential if they continue to demonstrate performance growth [2]

Market Movements - U.S. stock index futures are all up, with Dow futures rising by 0.65%, S&P 500 futures up by 0.81%, and Nasdaq futures increasing by 1.09% [1] - European indices also show positive movement, with Germany's DAX up by 1.35%, UK's FTSE 100 up by 0.29%, France's CAC40 up by 1.23%, and the Euro Stoxx 50 up by 1.55% [1] - WTI crude oil is up by 0.34%, priced at $64.27 per barrel, while Brent crude oil is up by 0.28%, priced at $68.14 per barrel [1][2] Market News - Small-cap stocks are regaining focus as expectations for Federal Reserve rate cuts rise, with the Russell 2000 index rising by 2.1% to 2453.36 points, marking its first breach of the historical closing high since November 2021 [3] - Despite the Fed's rate cut, market volatility is expected to increase due to uncertainty about future rate cuts, with significant internal disagreements within the Fed regarding policy outlook for 2026 [4] Corporate News - 71% of U.S. CEOs express concerns that tariffs are damaging businesses, highlighting frustrations with the current business environment during a closed-door meeting at Yale [5] - Deutsche Bank raises its forecast for the average gold price in 2026 to $4000 per ounce, citing continued demand from central banks and the impact of Fed rate cuts [5] Individual Stocks - Novo Nordisk's stock jumps nearly 7% after its diabetes drug Ozempic shows superior cardiovascular protection compared to Eli Lilly's Trulicity, with a 23% lower risk of heart attack, stroke, or death for Ozempic users [6] - FedEx's upcoming earnings report is seen as a critical indicator for the sustainability of the current bull market, amid concerns over the divergence between industrial and transportation indices [6] - Bullish reports a significant earnings increase, with Q2 EPS at $0.93, surpassing market expectations, and shares rise nearly 9% [7] - Palantir commits to investing £1.5 billion in the UK and secures a £750 million contract with the UK Ministry of Defence [7] - Roche acquires 89bio for up to $3.5 billion to expand into the weight loss drug market, with 89bio's key drug targeting metabolic diseases [8][9] - Arvinas partners with Pfizer to commercialize a breast cancer drug, with shares rising over 2% [9]

Core Insights - Small-cap stocks have finally joined the record rise of U.S. equities, ending a period of underperformance since the pandemic began [1] - The Russell 2000 index rose by 2.1% to 2453.36 points, marking its first close above the historical high since November 2021 [1] - This surge in small-cap stocks aligns with heightened risk appetite and market expectations of three potential interest rate cuts by the Federal Reserve this year [1]