U.S. Money Supply Is Finally Growing Again, and It Could Signal a Big Change Is Coming in the Stock Market
U.S. money supply started shrinking in late 2022 as the Federal Reserve raised interest rates. A tight money supply makes it hard for smaller businesses to compete.
IWM: Poised To Outperform Peer Small-Cap ETFs
iShares Russell 2000 ETF provides exposure to 2,000 U.S. small-cap companies, replicating the Russell 2000 Index. Vanguard Small-Cap ETF outperformed IWM and Schwab U.S. Small-Cap ETF since 2015; however, will it continue? Small-caps are a good allocation with potential for growth, especially with possible rate cuts in the future.
IWM: Small Caps Look Unattractive With Deteriorating Earnings Outlook
Small-cap stocks have underperformed compared to the S&P 500 due to persistent inflation and fading expectations for rate cuts. iShares Russell 2000 ETF tracks the Russell 2000 Index and offers exposure to U.S. small-cap stocks. The outlook for small-cap stocks has deteriorated, and the risk/reward setup does not currently warrant a Hold rating.
Options Alert: Asymmetric Trade Setup in the Russell 2000
At this point, we are all aware that the Russell 2000 has severely underperformed the broad market indexes over the last year.
IWM: Favor Small Caps Over The Technology Sector
The technology sector's outperformance likely to wane as the market enters a mid-cycle slowdown. Nvidia Corporation's valuation requires perfection, and its rate of growth is expected to slow dramatically. Small-cap stocks, particularly the Russell 2000 Index, present an attractive value proposition and may outperform Nvidia.
