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Feb 12, 2026
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SHORT
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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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