Small-caps beyond 50bp rate cut need improving fundamentals to grip leadership role: BofA

seekingalpha09-19

The big September swipe down in interest rates by the Federal Reserve is a positive move for small-cap stocks, but fundamentals need to be better for that cohort to sustain a leadership role in the ...

Source Link

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

We need your insight to fill this gap

Leave a comment

{"i18n":{"language":"en_US"},"isChannel":false,"data":{"share":"https://ttm.financial/m/news/2468583501?lang=en_US&edition=fundamental","thumbnail":"https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1358927461/image_1358927461.jpg","is_english":true,"pubTime":"2024-09-19 23:31","share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","id":"2468583501","market":"sg","top_or_hot":-1,"title":"Small-caps beyond 50bp rate cut need improving fundamentals to grip leadership role: BofA","media":"seekingalpha","content":"<div>\n<p>The big September swipe down in interest rates by the Federal Reserve is a positive move for small-cap stocks, but fundamentals need to be better for that cohort to sustain a leadership role in the ...</p>\n\n<a href=\"https://seekingalpha.com/news/4151239-small-caps-beyond-50bp-rate-cut-need-improving-fundamentals-to-grip-leadership-role-bofa\">Source Link</a>\n\n</div>\n","source":"seekingalpha","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Small-caps beyond 50bp rate cut need improving fundamentals to grip leadership role: BofA</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nSmall-caps beyond 50bp rate cut need improving fundamentals to grip leadership role: BofA\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-09-19 23:31 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/news/4151239-small-caps-beyond-50bp-rate-cut-need-improving-fundamentals-to-grip-leadership-role-bofa><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>The big September swipe down in interest rates by the Federal Reserve is a positive move for small-cap stocks, but fundamentals need to be better for that cohort to sustain a leadership role in the ...</p>\n\n<a href=\"https://seekingalpha.com/news/4151239-small-caps-beyond-50bp-rate-cut-need-improving-fundamentals-to-grip-leadership-role-bofa\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"VO","symbol_name":"Vanguard Mid-Cap ETF","start_time":0,"source_url":"https://seekingalpha.com/news/4151239-small-caps-beyond-50bp-rate-cut-need-improving-fundamentals-to-grip-leadership-role-bofa","article_id":"2468583501","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1358927461/image_1358927461.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2468583501","pubTimestamp":1726759906,"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"The big September swipe down in interest rates by the Federal Reserve is a positive move for small-cap stocks, but fundamentals need to be better for that cohort to sustain a leadership role in the eq","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"VO":"Vanguard Mid-Cap ETF","DFAS":"Dimensional U.S. Small Cap ETF","VOT":"Vanguard Mid-Cap Growth ETF","BK4581":"高盛持仓","IJR":"标普小型股600指数ETF-iShares","VB":"小型股指数ETF-Vanguard MSCI","SPSM":"SPDR Portfolio S&P 600 Small Cap ETF","BK4588":"碎股","IJH":"标普中型股400指数ETF-iShares","BK4550":"红杉资本持仓","BK4585":"ETF&股票定投概念","IWR":"罗素中盘股指数ETF-iShares","IJJ":"iShares S&P Mid-Cap 400 Value ETF"},"translate_title":"美国银行：降息超过50个基点的小盘股需要改善基本面才能占据领导地位","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"DFAS":1,"IJH":1,"IJJ":1,"IJR":1,"IWR":1,"SPSM":1,"VB":1,"VO":1,"VOT":1},"content_text":"The big September swipe down in interest rates by the Federal Reserve is a positive move for small-cap stocks, but fundamentals need to be better for that cohort to sustain a leadership role in the equity market, Bank of America (BofA) said.  The Fed on Wednesday jumpstarted its new easing cycle with a cut of 50 basis points, larger than the standard 25bp reduction. The fed funds rate stands at 4.75%-5%, and policymakers project further reductions.  “More cuts are an incremental positive for small caps given their rate sensitivity/refinancing risk, and bigger cuts help stem growth concerns. But we still believe that improvement in small-cap fundamentals is necessary for sustained small-cap leadership to resume,” Jill Carey Hall, BofA’s head of U.S. small/mid-cap strategy, said in a note Thursday, pointing out that more than 40% of small-cap debt is short-term or floating rate.  The Russell 2000 Index (RTY) of small-caps rallied in July on refreshed rate-cut optimism before pulling back. It was up +2% during Thursday’s action. After the rate cut Wednesday, the index had climbed more 2%, outstripping moves in large-caps (SP500)(COMP:IND)(DJI), but eventually ended down about 0.1%.  Hurdles for small-caps include earnings in recession, down -10% Y/Y in Q2, and guidance below consensus estimates, Hall said. Also, the macro picture is weakening while Q4 expected earnings growth is being cut, to +15% vs. +30% expected earlier in 2024.  BofA is staying tactically cautious on small-caps vs. large-caps and favors mid-caps. In small-caps, it favors Value over Growth as the former style contains more high-quality stocks, the strategist said. Small-caps tend to outperform large-caps in the six months after a first interest rate cut, and have a mixed performance over 12 months, Hall said.  The Russell 2000 (RTY) has risen +10% YTD and the S&P 500 (SP500) has charged up 19.6%.  Here are some small-cap ETFs: (NYSEARCA:IWM), (IJR), (VB), (SPSM), and (DFAS). Some mid-cap ETFs: (IJH), (VO), (IWR), (VOT), and (IJJ). More on the markets","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.0","shortVersion":"4.29.0","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2468583501"}