When good stocks turn bad

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And quality in the small cap rally

Good morning. Friday’s jobs report was middling-to-solid: 227,500 jobs were added in November, and the October number was revised up to 36,000 from 12,000. The unemployment rate ticked up a little, to 4.2 per cent from 4.1. The market took this all as a sign that the Fed will, indeed, cut the policy rate by 25 basis points later this month. The jury is still out for 2025.

Small companies have had a great run since Trump’s election, and there are good reasons why: greater domestic focus could give them an edge if trade barriers go up, and corporate tax cuts will have a higher proportionate impact on their earnings.

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