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]

ETF Market Inflows and Trends - Year-to-date net inflows into ETFs reach $623 billion, on track for another trillion-dollar year [2] - The industry is potentially heading towards $1.3 trillion in flows for the entire year, driven by low-cost and active strategies [3] - Stronger sector flows observed in the past three months compared to the prior three months, indicating tactical adjustments and improving sentiment [3][4] Communication Services ETFs (XLC) - Increased inflows driven by price and fundamental momentum, with the sector outperforming the broader market [4] - Communication services is the only sector with increased earnings estimates over the last three months, largely due to AI [5] - Beneficiary of the "one big beautiful bill act" due to high R&D expenditure that can be expensed at a higher rate, boosting cash flow [5] - Considered a safe haven due to its service-oriented nature, making it less impacted by tariffs [5] Small Cap ETFs - July saw $2 billion of outflows, contributing to net outflows year-to-date, reflecting a less robust economic outlook [6] - Small caps face challenges due to below-trend growth expected in 2025 and 2026, high interest costs, and significant debt financing [6][7] - Small caps have experienced negative earnings growth over the last three years, contrasting with the sizable positive earnings growth of large caps [7] - Sentiment favors large caps with AI tech benefits, higher cash flow, and less debt service, making them less tied to the economic cycle [8] ETF Recommendations for Current Market - Communication Services ETF (XLC) is recommended due to fundamental momentum, high earnings expectations, cash flow, earnings revisions, and limited tariff exposure [11][12] - Aerospace and Defense ETF (XR) is suggested due to macro momentum from increased defense spending driven by geopolitical conflicts [12][13]

Market Trends & Diversification - NASDAQ hits a record high, with Nvidia reaching a $4 trillion market cap, prompting a discussion on diversification beyond tech and large-cap stocks [1][2] - The narrative of US exceptionalism is considered overblown, suggesting opportunities outside the US market [3][4] - The market may be underreacting to tariff risks, with earnings reports after July 15th expected to provide more clarity [11][12] Investment Opportunities - Opportunities exist in smaller cap companies, particularly those domestically oriented, potentially benefiting from isolated trade impacts and faster AI implementation [6][7] - Small caps are trading at a significant discount, with EV to sales ratios about half that of large caps, indicating potential for earnings growth and valuation expansion [8] - Security-related sectors, including cyber, food, water, and defense, along with AI, present compelling investment themes [10][11] Small Cap Analysis - An active approach to small-cap investing is favored, rather than solely relying on indices like the Russell 2000 [6] - Smaller cap companies may benefit more quickly from declining rates due to their higher proportion of floating-rate debt [7] - Small-cap banks are crucial for the overall performance of the small-cap sector, presenting an interesting investment opportunity [15][16] Alternative Investments - Private credit is highlighted as an all-weather strategy, with interest shifting from direct lending to niche sectors like real estate debt and asset-backed securities [19][20] - A quantitative approach to analyzing markets, especially small caps, is recommended to synthesize data effectively [17]