This translation has been automatically generated and has not been verified for accuracy.Small and mid-cap U.S. stocks haven’t made quite as big gains this year as the larger indexes, but they could be poised for a breakout next year if the economy continues growing.
Despite the volatility, both the Russell 2000 and S&P Mid Cap indexes have been close on the heels of larger counterparts like the S&P 500 throughout 2019, and could close more of that gap next year.Investors have focused mainly on larger stocks, especially through futures, while small-cap stocks remain below their long-term average values and still have room to grow, according to Lori Calvasina, head of U.S. equity strategy at RBC Capital Markets, in a research report.
Still, investors need to see continued improvement in productivity, income and spending for a larger shift toward small cap stocks to take hold, Calvasina said. Job growth has been a key support for the economy and the latest government data blew away forecasts. Consumer confidence remains high and consumer spending, which accounts for about 70% of the economy, is still going strong. Those solid measures have offset concerns about a shrinking manufacturing sector and slower growth from services, which make up the bulk of the U.S. economy.