Moves in small caps and regional banks encouraging, says Citi's Stuart Kaiser

Watch on YouTube ↗  |  January 02, 2026 at 22:46  |  5:11  |  CNBC
Speakers
Stuart Kaiser — Head of US Equity Trading Strategy, Citi

Summary

Stuart Kaiser, Citi's Head of Equity Trading Strategy, joined Fast Money to discuss early-year positioning. He said small caps and regional banks are encouraging due to expected domestic stimulus from the 'big beautiful bill' and potential tax refunds. He also described typical start-of-year rotations into laggards as short-lived, and noted European January rallies tend to fade.

  • Stuart Kaiser expects more portfolio manager risk appetite at the start of the year.
  • He sees small caps and regional banks as likely beneficiaries of domestic stimulus.
  • He flags bonus season and tax refunds as incremental positive flow catalysts.
  • He expects early-year rotation from winners into laggards to be short-lived.
  • He notes European equities tend to rally in January before fading.
  • He warns early-year performance is not necessarily indicative of full-year returns.
Ideas
Stuart Kaiser Head of US Equity Trading Strategy, Citi 1:07
Small caps, regional banks benefit from stimulus.
The move in small caps and regional banks is encouraging because the 'big beautiful bill' is essentially domestic stimulus and smaller caps and regional banks are positioned to benefit most; start-of-year risk appetite, bonus deployment, and potential tax refunds also support these areas.
IWM KRE HIGH
Stuart Kaiser Head of US Equity Trading Strategy, Citi 2:41
Early-year laggard rotation is short-lived.
At the beginning of the year, the biggest flow tends to be a rotation out of winners into laggards, with portfolio managers willing to play catch-up in laggards like a Dogs of the Dow setup; however, this momentum rotation is typically short-lived, lasting only the first two to three weeks before calming down.
Dogs of the Dow MED
Stuart Kaiser Head of US Equity Trading Strategy, Citi 4:00
Europe January rally usually fades.
European equities have typically rallied strongly in January over the last few years, but that trend tends to fade once initial buyers are done; early-year strength is not indicative of full-year performance unless the investment thesis has meaningfully changed.
VGK MED
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This CNBC video, published January 02, 2026, features Stuart Kaiser discussing IWM, KRE, Dogs of the Dow, VGK. 3 trade ideas extracted by AI with direction and confidence scoring.

Speakers: Stuart Kaiser  · Tickers: IWM, KRE, Dogs of the Dow, VGK