EXCLUSIVE: Market Strategist Jay Woods Says 'Rotation In Small Caps Is Just Starting': Russell 2000 Within 8% Of All Times, 'Easy Upside Target'
Portfolio Pulse from Chris Katje
Market strategist Jay Woods suggests that the rotation into small-cap stocks is just beginning, with the Russell 2000 index showing significant recent gains. The iShares Russell 2000 ETF (IWM) has outperformed other major ETFs like SPY, QQQ, and DIA. Woods believes small caps have more room to run, especially as the Fed is done raising rates. However, he cautions that small caps might take a breather after the first expected Fed rate cut. Money is moving from sectors like technology to underperforming sectors like financials and real estate.
July 18, 2024 | 6:31 pm
News sentiment analysis
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NEGATIVE IMPACT
The Invesco QQQ Trust (QQQ) has returned -0.9% over the last month, underperforming other major ETFs. This underperformance may lead to a shift in investor interest towards small caps.
QQQ's negative performance over the last month may lead investors to seek better returns in small-cap stocks, as suggested by Jay Woods.
CONFIDENCE 80
IMPORTANCE 70
RELEVANCE 70
NEUTRAL IMPACT
Broadcom (AVGO) is expected to report quarterly earnings in August. Jay Woods anticipates volatility around these reports, but sees continued growth in technology and AI sectors.
AVGO's upcoming earnings report may cause short-term volatility, but the long-term growth outlook for technology and AI remains positive.
CONFIDENCE 75
IMPORTANCE 70
RELEVANCE 50
NEUTRAL IMPACT
The SPDR Dow Jones Industrial Average ETF (DIA) has returned 5.8% over the last month, showing solid performance but still underperforming IWM.
DIA's solid performance indicates stability, but it has not matched the gains seen in IWM. Investors may still find it a reliable option.
CONFIDENCE 80
IMPORTANCE 70
RELEVANCE 70
NEUTRAL IMPACT
The SPDR S&P 500 ETF (SPY) has returned 1.7% over the last month. While it has underperformed compared to IWM, it remains a stable investment option.
SPY's performance is stable but not as strong as IWM. Investors might see it as a less volatile option compared to small caps.
CONFIDENCE 80
IMPORTANCE 70
RELEVANCE 70
POSITIVE IMPACT
The iShares Russell 2000 ETF (IWM) has gained 10.9% over the last month, significantly outperforming other major ETFs. Jay Woods believes the rotation into small caps is just starting, suggesting more upside potential.
The strong recent performance of IWM and the positive outlook from Jay Woods suggest continued momentum for small-cap stocks. The ETF's significant outperformance compared to other major ETFs indicates strong investor interest.
CONFIDENCE 90
IMPORTANCE 90
RELEVANCE 100
POSITIVE IMPACT
NVIDIA Corporation (NVDA) has been one of the best-performing stocks over the last year. Jay Woods believes technology and AI sectors will continue to grow, despite some money moving to other sectors.
Despite some rotation out of technology, NVDA's strong performance and growth potential in AI make it a compelling investment.
CONFIDENCE 85
IMPORTANCE 80
RELEVANCE 50