Related: Biotech ETFs Hoping This Post-Election Trend Doesn’t Repeat
Further supporting the small-cap outlook, the U.S. economy is still showing signs of growth with U.S. retail sales and consumer spending trends on the rise while the rest of the world is revealing weaker economic data.
There is a belief that when smaller stocks outperform large caps through the first three quarters of the year that money managers will sell small caps leading up to the fourth quarter, opting for “benchmark hugging” with larger stocks.
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