US smallcap stocks now account for less than 4% of the entire US equity market.
They now reflect the same percentage of the market as 1930 before the Great Depression. As AI-hype as spreads, small cap stocks have significantly underperformed large caps. Currently, more than one-third of the Russell 2000 index has negative earnings, down from ~45% in 2020. Small-cap stocks are now hated more than ever. Source: The Kobeissi Letter
We are currently in the corporate buyback blackout period for most of the $SPX.
Since 2000, US corporations have bought back $5.5T of stock. This has amounted to more demand than any other market participant, and it’s not even close. 👇 Source: David Marlin, Goldman Sachs
Top Companies by Revenue - Now vs. 3 Decades Ago
Source: Visual Capitalist thru Win Smart
Below the relative chart of oil ETF $USO vs. S&P 500 ETF $SPY and the relative chart of oil stocks XLE vs. S&P 500 ETF $SPY.
Both just hit a 4.month relative high Source: J-C Parets
What are the biggest shorts?
Microstrategy $MSTR is one of the biggest shorts in the entire US market. Nvidia $NVDA is currently leading the pack. Source: Bloomberg
A contrarian idea on us small caps?
=> FUNDSTRAT: “.. Our top idea for 2024 is small-caps, where we see at least 50% upside .. Russell 2000 companies are set to grow .. faster than the $SPX .. Valuations are far more attractive .. when CEO confidence recovers, we also see the low valuations as setting the stage for synergistic M&A ..” Source: Carl Quintanilla, Fund strat
Global equity risk premium are now at the lowest since 2008.
Source: Mike Zaccardi
FT: 'Peter Thiel, Jeff Bezos and Mark Zuckerberg are leading a parade of corporate insiders who have sold hundreds of millions of dollars of their companies' shares this quarter
In a signal that recent stock market exuberance could be peaking. https://t.co/lFp5iOD53j Source: FT Activate to view larger image,
