Live Markets: SMID-caps poised to have their day?

Entegris

16/10/2024 17:14

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    SMID-CAPS POISED TO HAVE THEIR DAY? 
    Although small and mid (SMID) -cap stocks have delivered
above-average, double-digit gains over the past year, their
performance still has been unable to keep up with the torrid
pace set by their large-cap brethren.
    And while these stocks had an extremely impressive Q3 start
with both groups delivering one of their best monthly relative
performances over the past three decades during July, that
strength proved fleeting as small and mid-cap stocks revisited
underperformance territory during August through September.
    "We continue to believe that these stocks have been unfairly
punished (or ignored) given what we have viewed as a mismatch
between the fundamental underpinnings and the relative
performance of the group, and nothing has changed in that
regard," writes BMO Capital Market's chief investment
strategist, Brian Belski, in a note.
    Belski adds that "relative underperformance remains quite
extreme compared to historical standards and this sort of
weakness has typically been followed by swift rebounds over the
past 30 years."
    According to Belski, now that the Fed has kicked off its
easing cycle, historical data suggests that smaller-cap stocks
have tended to be main beneficiaries once the Fed starts to
lower rates.
    Therefore, BMO continues to advise investors to increase
their commitments to this area.
    However, given the dynamics of the SMID-cap space, Belski
prefers a highly selective approach when it comes to portfolio
positioning.
    Belski lists 17 stocks rated "Outperform" by BMO that are
included in BMO's U.S. SMID-cap portfolio. Among those stocks
are: Bunge  BG.N , Constellation Energy  CEG.O , Entegris
 ENTG.O , Snap  SNAP.N  and Take-Two Interactive  TTWO.O . 

    (Terence Gabriel)
     *****
    
      
    FOR WEDNESDAY'S EARLIER LIVE MARKETS POSTS:
    
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    US DEBT IS A 'REST OF THE WORLD' PROBLEM ... FOR NOW - CLICK
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    MIXED BAG IN EUROPE AS EARNINGS SOUR MOOD - CLICK HERE
    
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