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Feb 16
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—
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LONG
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Sebastien Page
CIO & Head of Global Multi-Asset, T. Rowe Price
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T. Rowe Price is "barbelling" exposure. They note US Small Caps need rate cuts to perform, and they see a breakdown in correlation where Asia/Non-US markets are outperforming due to better valuations. With the US market concentrated and facing "AI Scare" volatility, capital is seeking diversification. Non-US Value and Small Caps (if the Fed cuts rates as implied by the "risk-off" bond bid) offer the best risk/reward for rotation. LONG Small Caps and International Value as a diversification play against US Tech concentration. Fed keeps rates higher for longer; global growth slows. |
Bloomberg Markets
AI 'Scare Trade' Takes Hold; Talabat FY Earni...
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Feb 13
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LONG
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Jim Paulsen
Former Chief Investment Strategist, Paulsen Perspectives
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Paulsen states the economy is at "stall speed" (real GDP ex-trade is weak) and the job market has flatlined. He notes money supply is picking up, the dollar is falling, and the yield curve is steepening. The Fed will be forced to ease aggressively to prevent a recession. Historically, a backdrop of Fed easing, a lower dollar, and a steepening curve triggers a rotation away from crowded "New Era" growth stocks (Tech/AI) into neglected "Old Era" assets (Small Caps, Cyclicals, International). Long exposure to sectors that benefit from liquidity injections and a weaker dollar. If Zandi is right and inflation remains sticky at 3%, the Fed may not be able to ease as quickly as Paulsen expects. |
CNBC
The economy overall is weaker than widely ant...
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Feb 13
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LONG
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Scott Bessent
Treasury Secretary
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"The private sector numbers were more than 170,000, and government jobs were reduced... We're at the lowest ratio of government jobs to total jobs since 1966... If you look at the broad indices, whether it's the equal weighted S&P... or the small cap indices, they're doing fantastic... Regional banks are doing well." Bessent argues that the "reprivatization" of the economy and deregulation directly benefit domestic-focused companies over global mega-caps. He explicitly points to Equal Weight S&P (RSP) and Regional Banks (KRE) as the true barometers of this "Main Street" recovery, suggesting a rotation out of market-cap weighted concentration into broader cyclical breadth. Long domestic cyclicals and equal-weight indices to capture the "broadening out" trade. Re-acceleration of inflation could force the Fed to keep rates high, hurting small caps and regional bank balance sheets. |
CNBC
Watch CNBC's full interview with Treasury Sec...
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Feb 12
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SHORT
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Gerry Fowler
Chief Strategist, UBS Investment Bank
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The market has been rotating into "low quality" and Small Caps, behaving as if the economy is in an "Early Cycle" phase due to expected fiscal boosts. Credit and labor markets indicate we are actually "Late Cycle." The rotation into low-quality/small-cap stocks is a head-fake. In a late-cycle environment with high tariffs and inflation risks, pricing power and high margins matter most. LONG High Quality (specifically Software/Microsoft) and SHORT/FADE the Small Cap rally. If fiscal stimulus actually resets the cycle to "Early," Small Caps will continue to rip. |
Bloomberg Markets
Nuveen to Buy Schroders in Near £10 Billion D...
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Feb 11
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WATCH
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Robert Leshner
CEO, Superstate
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When asked who is adopting tokenization, Leshner specifies that "companies that are smaller, that are in like the billion to $5 billion range, are ones that are most interested." Unlike the "Mag 7" which have infinite liquidity, smaller public companies suffer from fragmented liquidity and limited global access. They will be the first non-crypto movers to tokenize equity to access global capital markets and 24/7 trading, potentially reducing their cost of capital. Watch for small/mid-cap firms announcing tokenized equity raises as a catalyst for liquidity events. Reputational risk if early tokenized issuances face technical bugs or regulatory scrutiny. |
CNBC
CNBC Digital Finance Forum: Crypto Innovators
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Feb 11
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—
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LONG
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Brian Belski
Investment Committee Member
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"We're in the process of transitioning... from a momentum multiple driven market to an earnings driven market... Other areas of the market are working: Dividend Growth, Value, Small Cap." As the bull market matures (Year 4), price appreciation will no longer come from PE expansion (hype) but from actual earnings delivery. Since Small Caps and Value have lagged, capital will rotate there as they gain earnings credibility. LONG. Focus on Dividend Growth and Small Cap sectors as the market broadens. If rates stay persistently high, Small Caps (which are rate-sensitive) may struggle to finance growth. |
CNBC
Here's how to trade around the hot jobs repor...
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Feb 11
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SHORT
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Lisa Shalett
Chief Investment Officer, Morgan Stanley Wealth Management
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43% of the Russell 2000 is unprofitable. Small caps are "really, really low quality." They cannot make money even with nominal GDP over 5%. If the economy slows, these companies are structurally broken. The "Small Cap" trade is a trap; quality is elsewhere. SHORT Small Caps. A massive drop in interest rates could temporarily float zombie companies. |
Bloomberg Markets
Bloomberg Surveillance 02/11/2026
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Feb 11
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LONG
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Michael Gapen
Chief US Economist at Morgan Stanley
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"Her thesis is that you will see some broadening out in 2026. As you mentioned, the rebounding small caps... We think if you get a stabilization in the labor market inflation does come down. It can support purchasing power of other parts of the economy." The speaker explicitly validates the "broadening out" thesis. As inflation cools and purchasing power restores beyond the top percentile, capital will rotate from the concentration in mega-caps to the average stock (Equal Weight) and smaller companies which are more sensitive to domestic economic health. LONG Small Caps and Equal Weight indices to capture the rotation. Inflation remains sticky, preventing the purchasing power restoration required for the rotation. |
Bloomberg Markets
This Jobs Report Is 'Largely the Real Deal,' ...
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Feb 09
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LONG
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Doug Boneparth
President of Bone Fide Wealth
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The speaker advises looking away from US Large Caps and focusing on Midcaps, Small Caps, Developed International, and Emerging Markets. These "boring" sectors are becoming exciting because they offer better valuations and diversification compared to the crowded US tech trade. They are coming off a strong performance in 2025 and offer a way to stay invested without overexposure to US tech volatility. International markets had an "amazing 2025." Global macroeconomic instability or trade wars. |
CNBC
Market rotation holds as AI uncertainty keeps...
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