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<ul class="summary-list"><li>The rally in small-cap stocks is set to continue after a bullish signal flashed for the first time since 2009, Fundstrat says.</li><li>The Dallas Manufacturing Survey shows a sharp spread between current and forward expectations.</li></ul>The <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/stock-market-rally-broadens-small-caps-another-win-for-bulls-2024-7#:~:text=The%20S%26P%20500%20rally%20is,of%20the%20current%20bull%20market.">July rally in small-cap stocks</a> is set to continue after a bullish signal flashed for the first time since 2009, according to Fundstrat's Tom Lee.In a video update to clients on Tuesday, Lee highlighted that the most recent regional Dallas Manufacturing Survey showed that forward expectations are turning positive in a big way."What's notable was that current conditions are negative, but forward expectations jumped to +22, and as you can see, that's the highest spread between forward and current since 2009," Lee explained.<div type="image" title="Small cap stocks" height="919" width="1160" msid="112143943" hostid="261" sizebytes="60422"></div>Such a sharp spread between current and forward expectations in the Dallas manufacturing survey has historically preceded big moves in small-cap stocks."Take a look at what it means for small-cap stocks, because again this is a cyclical survey. That last instance was basically at the very bottom of a huge move in the Russell 2000 in 2009."<div type="image" title="Small cap stocks signal" height="925" width="1171" msid="112143944" hostid="261" sizebytes="40086"></div>"And if you look at the instances where you've had sizable spreads, four of four times that was in front of a pretty big move for small-cap stocks, so I do think that this again is a buy signal confirming why we're in the summer of small-caps," Lee said.A 10% rally is in the cards for small-cap stocks in the month of August, and <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/small-caps-russell-2000-rally-outlook-sp500-selloff-fundstrat-tech-2024-7">an even bigger rally of 40% could unfold by the end of September,</a> Lee has said in recent weeks.Much of Lee's bullishness on small-cap stocks is based on compelling valuations, falling inflation, and the expectation of interest rate cuts later this year.

A bullish signal for small-caps is flashing for the first time since 2009, indicating more upside ahead, Fundstrat says

Mutual funds stress test: What it means for you

Shares of <keyword id="19956271" type="General" weightage="100" keywordseo="Ola-Electric-Mobility" source="keywords">Ola Electric Mobility</keyword> were in a freefall today, tanking about 4.55% on the NSE and 4.88% on BSE. Today also marked 30 days since the company was listed on the bourses (August 9th), bringing down shutters on the one-month lock-in window anchor investors are mandated to hold stocks for, before deciding to offload 50% of shareholding. Around 18.18 crore shares, or about 4% of company's outstanding shares were eligible for trading in the market post the 30-day lock-in, which hurtled Ola's stock towards Rs 100. While the stock managed to gain some ground later in the day, and was trading at Rs 114.10 when the markets closed today, slightly up from its intraday low of Rs 109. However, it still remained a far cry from its all-time high price of Rs 157.4, which it had hit on August 20th, 2024. Ola Electric, which currently dominates the Indian EV space, debuted on stock exchanges last month, and was looking to raise Rs 6,145.56 crore via fresh issue, along with an OFS (offer for sale) of 8.49 crore equity shares. The IPO was oversubscribed by around 4x. Going ahead, the Bhavish Aggarwal-led startup is also set to face intense competition from fellow EV maker Ather Energy. With its IPO set to hit the markets soo, Ather is looking to raise Rs 3,100 crore via fresh issue, and an OFS of about 2.2 crore equity shares. Per the DRHP (draft red herring prospectus) filed by Ather, its net worth for FY24 stood at Rs 545.9 crore. The remaining 50% of Ola Electric's shares will be eligible for offloading by anchor investors in 60 days from now, or 90 days since the date of allotment. While this event will certainly test Ola's buoyancy in the market, the fact remains that Ola was off to a stellar start days after its listing, when the stock price accelerated to Rs 157.4 on August 20th, 2024. This skyrocketed the company's valuation well beyond that of established Indian 2-wheeler giants like Hero Moto Corp and Bajaj, albeit briefly. In fact, for a small period, Ola Electric Mobility had recorded valuations higher than that of Tesla's. For perspective, Ola's market capitalization, as of today, stood at Rs 50,327.57 crore. Bajaj Auto, which listed on the exchanges in 2008, presently has a market value of Rs 3,02,993.79 crore, while Hero Moto Corp, which was listed in 2003, currently has a market value of Rs 1,14,788.59 crore. However, ever since hitting this peak on August 20th, Ola's prices have only been on a downward journey. However, now that the stock has witnessed a price correction of sorts, the question remains- has Ola corrected enough, or are we still in for further downside? As per SEBI registered Investment Advisor Gaurav Goel, Ola continues to trade in the expensive zone despite recent correction. "The recent mercurial rise in the stock has been more on the promise it holds for the future. It is the largest <keyword id="23099550" type="General" weightage="20" keywordseo="E-Scooter-Manufacturing" source="keywords">E-Scooter Manufacturing</keyword> company in India, with 31% market share in the E2W sector, selling 3,29,618 scooters in FY24. Recently, it also forayed into the motorcycle segment with several new “Roadster” models at an attractive pricing. It is building an Ola Gigafactory for cell production in Tamil Nadu, and a Battery Innovation Centre in Bangalore", Goel explained. "However, we feel that despite attractive future plans, the stock is currently overpriced. Despite rising revenues, we need to see how quickly it is able to translate widening losses into profits", he continued. <h2>Gaping holes, take a long-term approach </h2>It is hard to overlook the wide, year on year losses that the company continues to incur. As of March 2024, the company had racked up an operating loss of Rs 1,266 crore. Per its Q1FY25 financials, the company's losses before taxes during April-June 2024 grew to Rs 347 crore, up from Rs 267 crore in the year-ago period. The company's cash flows from operating activities continued to be in red, rising from Rs 2,520.25 crores in March 2021 to Rs 15,072.71 crore as of March 2023. Generally, if a company is regularly registering negative cash flows from its primary, operational activity, it is a troubling sign, indicating that the company is spending more than what its making. Ola continues to rack up major losses in its cell business, which reported a loss of Rs 5 crore in Q1FY25. The segment's operating expenses, however, doubled from Rs 11 crore in Q1FY24 to Rs 22 crore in Q1FY25. Per Agrawal, the indigenously developed 4680 Bharat Cell, which will be integrated in all Ola vehicles starting Q1FY26, will help in bettering the company's profit margins, given that cells constitute around 30-35% of overall vehicle's cost. Which is why experts suggest not to buy into any short-term euphoria surrounding the stock, and instead, opt for a long-term approach. While there is scope, it is largely unchartered waters, which will have to face the tides of multiple market volatilities and cycles, before it starts to generate sustainable, significant returns. Goel believes that while the new vehicle segment is a good space to enter, the competition here is going to be stiff. Customer actual response in terms of sales is yet uncertain. "We recommend a buy on dips on this stock. An entry level of Rs 100 would be good point for purchase. It should be kept for the long-term, for a period of at least 3-5 years for realization of its potential"

Shares of Ola Electric have tapered down from their record-highs. Is this a good time to buy in?

<ul><li>According to AMFI data, <keyword id="19978171" type="General" weightage="20" keywordseo="as-of-early-december" source="Orion">as of early-December</keyword>, the average one-year returns for 23 small-cap funds stood at 32.68%. </li><li>58% of the large cap funds failed to beat their underlying indices in the first half of 2023. </li><li>Contributions to <keyword id="159805" type="General" weightage="20" keywordseo="sips" source="Orion">SIPs</keyword> surpassed a record ₹17,000 crores in November. </li></ul>After a brutal 2022, <keyword id="6357979" type="General" weightage="20" keywordseo="mutual-funds" source="Orion">mutual funds</keyword> have had a solid year in 2023 with retail investors having come of age. Moreover, according to Association of Mutual Funds in India (AMFI) data, mutual funds industry assets under management (AUM) have crossed the ₹50 lakh-crore mark! Investments into equity mutual funds saw an inflow of ₹124,053 crore in the first nine months of 2023 indicating a strong interest and belief in the potential of the equity market among domestic investors. This was not of course without its share of blips. In April 2023, inflows into equity mutual funds stood at ₹6,480 crore, down 68% from March when it was ₹20,534 crore. Last time inflows were lower was in November 2022, when it stood at ₹2,258 crore. Inflows into equity mutual funds again halved in May, probably because high market valuations made investors book profits and stay away from fresh investments. However, ever since then the flows into equity mutual funds have remained steady, reaching a high of ₹19,932 crore crore in October. Small and mid caps steal the show According to AMFI data, as of December 6, 2023, the average one-year returns for 23 small-cap funds stood at 32.68%. In contrast, 28 mid-cap funds delivered average one-year returns of 28.02%, in the same period. By November end, AUM of mid-cap funds had crossed the ₹ lakh crore mark, a 69% rise as compared to last year. In fact, small cap funds registered inflows of ₹3,699.24 crore in November ,slightly lower than the ₹4,495.13 crore recorded in October. Small cap funds had registered a record inflow of ₹5,472 crore in June, with inflow into small cap mutual funds being the highest among all equity fund categories for the third straight month. In August, small cap funds saw an inflow of ₹4,265 crore, with a slight blip in September when inflows fell to ₹2,678.47. This has been driven by the ongoing economic recovery, which has fueled corporate earnings growth, particularly among smaller companies with high-growth potential. Investors are optimistic about the future prospects of these companies, leading them to seek exposure through small-cap funds. AMFI chairman said it was the outcome of a recency bias. The surge in investor interest in mid-cap funds has also been fueled by several factors, including India's robust economic recovery, the inherent growth potential of mid-cap companies, their reasonable valuations compared to large-cap stocks, and supportive government policies. Large-cap funds funds underperform Large cap funds, however, had a rather dull 2023. Large-cap mutual funds experienced significant outflows in June, July, and May, totaling ₹2,050 crore, ₹1,880 crore, and ₹1,362 crore, respectively, making these some of the worst months for large cap funds. However, following six consecutive months of outflows, large-cap funds experienced an inflow of ₹724 crore in October, signaling a resurgence in investor confidence in established companies. November saw an inflow of ₹306 crore. In fact, 58% of the large cap funds failed to beat their underlying indices in the first half of 2023. This can be due to the confluence of factors, including rising interest rates favoring bonds, regulatory changes limiting fund manager flexibility, investor rotation seeking higher growth in smaller-cap stocks, and underperformance in key sectors like technology and consumer discretionary. SIP contributions witness a steady rise One of the biggest trends is the steady increase in monthly SIP contributions. SIP inflows reached ₹1.66 lakh crore in the first 11 months of 2022, higher than ₹1.5 lakh crore in entire 2022. Contributions surpassed a record ₹17,000 crores in November. In November 2022, the SIP contribution stood at ₹13,306 crore. The number of SIP accounts were at the highest ever in November at 744.13 lakh crore, compared to 730.02 lakh crore in October. The total SIP AUM (assets under management) has also shown impressive growth, exceeding ₹6.42 lakh crores in October. Despite facing market fluctuations, SIPs have demonstrated remarkable resilience. The consistent inflows and stable AUM indicate that investors are adopting a disciplined approach and remain confident in the long-term prospects of the market.

Retail investors come of age in 2023 with small and midcap funds outperforming

<ul class="summary-list"><li>Investors are worried that labor market weakness could thwart a soft landing.</li><li>However, Goldman Sachs' Joseph Briggs doesn't think there's reason for concern.</li></ul>As inflation creeps downward, investors are increasingly turning their attention to the labor market to look for clues of a soft landing.Both July and August employment data fell short of Wall Street expectations after revealing lower-than-expected job additions, sparking fears of a recession and sending stocks tumbling. The highly anticipated September jobs data will be released this Friday.Investors shouldn't be worried, though. Labor market fundamentals remain strong, according to Joseph Briggs, co-lead of Goldman Sachs' global economics team and a former Federal Reserve senior economist."If we take a broad assessment across a number of different labor market indicators, they are still roughly where they were from 2017 to 2019, and that was a pretty healthy labor market," Briggs said.In Briggs' view, the following three indicators point to a normalizing late-cycle labor market, and in turn, a strong economy.<h2 id="8324345f-3390-4c5f-b3f9-7002460cb3bb">3 signs of a healthy labor market</h2>Layoffs are one important indicator of the job market's health, and luckily, companies aren't laying off many workers right now.Both layoff rates and initial claims are hovering at or below pre-pandemic levels, Briggs pointed out. Initial claims, or first-time jobless claims filed by individuals seeking unemployment benefits, dropped to a four-month low of 218,000 last week.Low layoffs, in particular, are a positive sign because they help the economy avoid a dangerous feedback loop, Briggs said. Layoffs lead to decreased consumer spending, hurting companies, which leads to even more layoffs.Thankfully, the labor market isn't experiencing this sort of spiral right now. "We're not really seeing any signs on a widespread basis that employers are actually firing workers," Briggs said.On the contrary, consumer spending is quite robust, driven by continued job gains and wage growth, according to Briggs.Wage growth is improving and exceeding inflation this year, posting 3.5% year-over-year growth in August 2024. Real average weekly earnings increased 0.2% from July to August of this year. Briggs predicts that US workers could see 2.0 to 2.5% real income growth in the upcoming year.The US economy is also adding jobs at a steady pace that supports consumer spending, Briggs said. In August, 142,000 jobs were added, which Briggs sees as a healthy monthly increase. He expects the US economy to continue adding jobs at a rate of 140,000 to 150,000 a month. This pace of job growth isn't as aggressive as it was during the post-pandemic hiring frenzy, but that's to be expected as the labor market normalizes, and investors shouldn't take this development as an indicator of recession.Lastly, GDP growth remains strong, setting the stage for a favorable hiring environment. The US economy posted 3% annualized GDP growth in the second quarter of 2024, faster than the 1.4% growth rate in the first quarter and beating Wall Street expectations.Briggs is optimistic about future GDP growth as well. He expects the impacts of the Fed's rate-cutting cycle to start manifesting in the economy relatively quickly, boosting US GDP within the next few quarters.The overall economy has been improving in the past few months in anticipation of rate cuts and will continue to do so, in Briggs' opinion. Most notably, mortgage rates have been decreasing."The changes that we've seen over the last few months point to about a half-point boost to annualized GDP growth over the second half of 2024 and the first half of 2025," Briggs said."There are sectors of the economy that are still highly rate sensitive, and these will have a clear impact on GDP growth," he added.These areas include the housing market, consumer durables, small-cap companies, and industries such as software and pharmaceuticals. With multiple areas of the economy set to benefit from rate cuts, investors should be confident that a soft landing and strong labor market are in the cards.

You Searched For "small cap indices" and got 5 results

A bullish signal for small-caps is flashing for the first time since 2009, indicating more upside ahead, Fundstrat says

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Retail investors come of age in 2023 with small and midcap funds outperforming

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These 3 indicators are pointing to a healthy labor market similar to the pre-pandemic boom, according to Goldman Sachs

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