저자: 미상 · 외국인
요약 보기
2024년 7월 GDP 서프라이즈(2.8%) 이후 소형주(Russell 2000)가 급등. 연준 금리인하 기대와 트럼프 정책 기대(규제완화, M&A, 지방은행)로 소형주 로테이션이 지속될 것으로 봄. 다음날 PCE 발표가 핵심 변수이며, 예상보다 낮으면 소형주 강세, 대형 기술주 약세 가능성. 대형주(S&P 500)는 8월 대체로 횡보, 정치 불확실성 등으로 하방 위험 언급. 소형주에 대해 현금보다 긍정적인 견해 제시.
다듬은 글
in just a matter of hours following some new developments Wall Street went from Panic sell to panic buy especially in your small caps the Russell 2000 at the time of recording this video is up about 2.3% today and did most of this gain in just about 2 hours and this new development today really validates what Tom Le has been saying for weeks now really months about small cap stocks it was actually the GDP growth rate so you came in at 2.8% the estimate was about 2% this was a big beat to GDP and if we are truly heading into the fed that's going to cut rates three times this year Well you need the backdrop of the economy remaining strong because that means the FED is cutting because inflation is falling not cutting because the economy is weak normally the FED Cuts because they're forced to because the economy weakens that's why you rarely ever get quote unquote soft Landings or no Landings because typically the FED only cuts when the economy weakens and typically the economy weakens as the FED starts to and and does raise rates but apparently that's not happening now as I have said many many times here on this channel the Kryptonite for small cap stocks specifically is the economy because they are cyclical to the economy meaning small caps tend to do well when the economy is doing well they tend to do poorly when the economy is doing poorly but they are also very interest rate sensitive so it's almost like you need both of these things to work in conjunction for that outsized gain you need the economy to be strong and you need the FED to start lowering rates if you get that setup which today validates at least one portion of that the economy staying strong part you could be Off to the Races in small caps and see a rally in which you have not seen in many years tomorrow we will get more information that could validate the inflation falling part of that setup I guess I don't want to call Theory but setup coming tomorrow morning I will share that with you in wall Street's estimates in just a moment but I think you need to take a listen to what Tom Lee just said on CNBC this morning uh and I think you're going to give us a little bit of that today for our wounds from yesterday but not entirely cuz you think the S&P is probably going to be flat for August overall yeah yes that's right and that's unlike some of your recent calls about the S&P with friendlier inflation data you've made some calls about some big near-term moves that's not what you're saying today unless you're talking about small caps yes that's right I I think part of what we saw yesterday was you know the rotation that's painful away from large caps and I think Tesla earnings and Google sort of accelerated some of that and I think there's been some uncertainty about the fed's commitment to cutting even though we we expect inflation to Fall Like a Rock but when the FED starts cutting that's good for small caps and there has been I think overseas some unwind of that J jip Chan carry trade that's hurt the NASDAQ but to me this is why the S&P had a great first 6 months maybe it needs to consolidate those gains but now Russell 2000 has an 11 median PE earnings growth 800 basis points faster and you know it just posted 11 days where 10 out of 11 days were had a 1% move the the nine times that did that since 1979 when you weren't in a bare Market we were up 100% 1 month 3 months 6 months 12 months later 12- month average gained 40% you're very popular and I I would warn you this this is not good that you're saying this um you think this rotation has been driven by expectations of a trump White House is there's another way you can say that can you come up with something else so you don't have to delve into the political side you think Trump's going to win the White House or you think the market at this point thinks he's going to win the White House yes it's the second that betting markets are putting a 65% probability of a trump white house uh the biggest beneficiary which is deregulation m&a Regional Banks doing better that's small cap stocks okay so that's that's the linkage that that you're seeing then so you really think we've seen a trump trade and even after I mean the the betting markets have moved somewhat uh he he's come down uh vice president K Harris has moved up a little in the betting Market since uh the weekend when the news came out you still think that that's at play from here on not just what to explain the rotation that we've already seen you think it's going to continue that's right so I think it's from this point forward there's a lot of opportunity in small caps part of it is that there's a lot of overlap when the FED Cuts that's lowering cost of money that's good for small caps in the regional Banks it probably boosts CEO confidence which is m&a and that benefits small cap so there's a lot of overlap between a Fed cut imminent and a trump White House and that's why I think the interplay is is positive for small caps interesting so I I still don't understand um you're you're not you don't think the large caps are are are done you just think it's a Slowdown for for the S&P 500 level yes that's right I think the the mag 7 was was very attractive at the start this year because growth was scarce and they've had great visibility and they're not expensive you know 27 times earnings isn't demanding but now that there's a visible Catalyst for small caps I think investors are taking some profits up you know NASDAQ was up 20% and putting it into small caps I mean I don't know how you guys feel but Tom Lee tends to be correct now this latest call for a 40% % rally over 10 weeks has been a pretty aggressive call and so far so good for Tom Le's um recent bold prediction tomorrow is going to be very important in validating just that because tomorrow we're going to get core PC price index month over month this is the fed's preferred measure of inflation last month you came in at 0.1% we are expecting 0.1% again but I do want to preference you in saying it's not just this headline number that really matters that's what people kind of look at initially but it does get rounded down to an actual smaller decimal so for an example with the CPI report we had uh three four weeks ago we were expecting 0.21% which would have gotten round down to 0.2% we we got 0.06% so that got rounded up to 0.1% but that was pretty close to being rounded down to zero okay so for tomorrow if we're expecting 0.1% you could come in at 0.15% 0.15% that would actually be a very good number but it would get rounded up to 0.2% you could come in at 0.06% the same as the CPI report a couple of weeks ago and you would still get rounded up to 0.1% but obviously the 0.06% number is much better than 0.15% so I I I do just want to preference you with with saying that now you could also come in at 0.19 0.19% and get rounded up to 0.2% but that's a really really um bad number compared to expectations now if you take a look at the last couple of months for PC month over month this is the period that the FED kind of got a little bit concerned because we were coming in at 0.
1 0.2 pretty consistently from July until December of 2023 and this got the markets very excited this was the last big rally we had in small caps and then you came in at 0.5% 0.3% 0.3% 0.3% four months of really bad PC data and then last month you came in at 0.1% now we're expecting another 0.1% number this will be two months of better than expected core PC this will really validate the FED that they can start to cut rates now the markets are already ahead of them they're already saying yeah the fed's going to be cutting in September for sure and we'll take a look at those probabilities here in just a second but if this report does come in better than expected hopefully with a lower than expected actual number you're really going to start to put on this small cap trade considering the GDP report that came out today I think in other words if pce comes in lower than expected tomorrow you could have a massive day for the Russell 2000 like a 5% day would not surprise me for the Russell tomorrow but at the same time remember what happened with the CPI report that came out a couple of weeks ago that day the Russell had a massive outperformance the Russell was up close to 4% and the S&P was down over 1% because big Tech got sold off because again what Tom Le just said that's where the growth was growth was was was scarce at the start of this year there were pretty low expectations for other parts of the markets especially your small cap stocks and big Tech is kind of seen as that defense trade that safety trade if we are going into a recession perhaps Nvidia is going to do better than a small cap stock perhaps Microsoft or meta or Google are going to do better than small cap stocks but if there's no recession as per the GDP data this morning and inflation comes down and the FED can start cutting rates I see no reason why big Tech would outperform so in fact you could see another repeat of the CPI report that we just got a couple of weeks ago where big Tech sells off and small cap outperforms and then it's going to be a lot harder as well for Wall Street to say that this small cap rotation is just shortlived now yes I think today did a lot to really reaffirm this rotation into small caps is viable and going to continue for a while but you get the fed's preferred measure of inflation pce coming in lower than expected as well tomorrow yeah and you're going to get a lot of people that seemingly overnight are going to become way more bullish on small caps I mean how would you logically as a quote unquote sophisticated Wall Street investor or fund manager say small caps don't look attractive with 2.8% GDP and three expected fed cuts by the end of this year I mean you should be fired if you are a professional money manager and rebuke small caps in that environment especially considering like Tom Lee said small caps are expected to post 8% better EPS growth than the S&P 500 for this quarter and really over the next 2 years you're going to outgrow the S&P I do defer a little bit with Tom Lee because I do think if we get lower than expected pce report coming out tomorrow that's going to be negative overall for the SNP because of your mega cap Tech that would likely get sold off and I do think the political uncertainty will start to affect the S&P a little bit more in the month of August as well as in September I think you're still likely going to get more downside not necessarily just an S&P that is flat but I do think the Russell can do very well even if if the S&P sells off or goes through a correction in fact with the data that we got today with the GDP Report with potentially a lower than expected PC report tomorrow you could actually start to look at the Russell as a safety trade as a hedge to the broader markets which I know that sounds crazy but the Russell really comes down to what's the FED doing and that's looking to cut rates here in about the next month and a half or so what's the economy doing economy strong fed cutting rates I mean seriously what's there not to like now again I'm not a financial adviser I'm not a financial planner do what you guys want to do uh I think cash is probably the best bet here if you don't want to bet on small caps I I mean I don't blame you the historical preceden is small caps usually outperform for a period of time and then they underperform again I understand but it's hard to make a bearish case for small caps and without the MA 7 being where they are I mean I I would call them pretty expensive Rel relative to what the growth is actually going to be I I I I even think the S&P on an equal way basis looks pretty attractive here with the backdrop of lower inflation and a stronger economy the markets are currently implying a 7.2% probability of a Fed cut coming July 31st that is next week a 92.8% chance of no action from the the FED now September 18th you're pricing in an 89.1% chance of one cut and 10.7% chance of two cuts actually 0.3% chance of three cuts by September uh that that would be absolutely insane let's just say that but the PC report coming out tomorrow if it is lower than expected will probably raise the odds of a July 31st cut which again could uh help support your small caps now by the end of this year by December 18th your pricing in three rate Cuts with a 53.5% probability and two cuts is priced at 36.9% odds so I think tomorrow will be a very critical day for this small cap rotation if CPI or PC comes in a little bit higher than expected I would expect the Russell sells off a bit I would expect Mega caps can do a little bit better um with that um kind of backdrop but I I still wouldn't think the Russell trade is over with but it would take a little bit of consolidation and you made it to the end of this video hopefully you learned something or gain some greater Market perspective that will hopefully help you make more money you guys most importantly enjoy the rest of your day and I will see you in the next one
Comments 0