Russell 2000 could Hit 1,800 by Year-End

05:29 09/18/2018

Small cap stocks have been the standout winners of 2018. Granted, it’s fair to wonder how much longer they can outperform. But from what we’ve seen, the small-cap rally could push higher. As compared to the 8% gain for the S&P 500, the Russell 2000 is up 10% on the year so far. And to be honest, we wouldn’t be shocked to see the Russell 2000 at 1,800 by year-end. “Everyone’s flocking to the U.S.,” said Kristina Hooper, global market strategist for Invesco, quoted by The Wall Street Journal. “Investors view small-or midcap names with more U.S. exposure as a safe place where they wouldn’t have to deal with the trade war.” In addition, those worried about trade disputes, are betting on companies with a greater share of domestic earnings, or small cap names. We’re not the only ones calling for 1,800 on the Russell 2000. In fact, B. Riley FBR also believes it’ll happen. We’re in the early innings of this run,” they noted in May 2018, as quoted by CNBC. “This is a trade that’s got legs.” Analysts at Stifel say much of the same. They believe small caps will rally into the close of the year. All thanks to strong financial performance and tax reform, which reduced the corporate tax rate on small cap stocks. Driving further interest into small cap stocks is the fact most are insulated from geopolitical issues, such as trade war fears. Small caps have much less exposure to international headaches than companies in the S&P 500.

This article has been provided by a Chasing Markets contributor. All content submitted by this author represent their personal opinions, and should be considered as such for entertainment purpose only. All opinions expressed are those of the writer, and may not necessarily represent fact, opinions, or bias of Chasing Markets.
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