Not all small caps are created equal
US small-cap companies had a strong start to the second half of the year, with a rally of over 10.5% so far in July, after underperforming large-cap companies by almost 15% in the first half of 2024. The weaker-than-expected reading of the June Consumer Price Index (CPI) index triggered a rotation from investors into parts of the market that had so-far lagged. In this Macro Flash Note, Economist Joaquin Thul argues that while the asset class may look attractive, investors should remain selective in their small-cap exposure.
