After a rocky 2023 for small-cap stocks, eToro US Investment Analyst Callie Cox joins Yahoo Finance as part of its Chartbook series to discuss why small-cap stocks could be slated to outperform in 2024.
Cox sees significant opportunity, noting charts show “skepticism about the economy up until now.” As economic data improves, she expects “small-caps to catch up.” With consumer spending comprising 70% of GDP and jobs data “staying resilient” amid other strong economic indicators, Cox says the Federal Reserve has “tipped their hat” to a potential soft landing scenario.
She explains small-cap markets are “dependent on debt” and “sensitive to the US economy.” The recession worries plaguing markets “hammered” small caps, but subsiding concerns and solid data could lift the asset class as the Fed gets ready to potentially cut interest rates.
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Editor’s note: This article was written by Angel Smith
