这种情况可能会改变，Analysts point out that in the past 11 USA presidential election years, in 4 years, the small cap index rose 6.5% or more in the 13 days following the election.
USA-based renowned financial services company Cantor Fitzgerald stated that, with a series of perfect factors before the US presidential election, small cap stocks are expected to catch up.
US small cap stocks have lagged behind in the recent market rebound,E-mini Russell 2000 Index Increased by 2.5% last month, while the s&p 500 index surged nearly 4%.
This situation may change, as small cap stocks typically perform well near the presidential election. Cantor Fitzgerald suggests that recent polls supporting Trump also indicate positive signs for the industry.
The company mentioned that the e-mini russell 2000 index has been consistently lagging. Chief strategist Eric Johnston stated in a report on Monday that in the current bull market, the timing to 'bottom fish (e-mini russell 2000 index)' may be ripe.
Johnston mentioned that historically, the e-mini russell 2000 small cap stock index tends to experience significant fluctuations around the presidential election. In the past 11 election years, there were 4 election years where it increased by 6.5% or more within 13 days after the election. This impact tends to be even greater towards the end of the year. In four years, the e-mini russell 2000 index saw an increase of 12% or higher before the end of the year.
Johnston acknowledges that each election year has unique conditions, but the data shows that before and after the election, the e-mini Russell 2000 index may experience a 'significant increase.'
Johnston also predicts that the probability of Trump winning will continue to rise, which will benefit small cap stocks even more. He cited data from RealClearPolitics, which shows that in the absence of swing states, Trump wins 302 electoral votes, while Vice President and Democratic candidate Harris gets 236.
Johnston said that this does not even include Trump's performance in swing states in 2016 and 2020, which exceeded the predicted records. This means Harris would need to win bigger victories in key states than current polls show.
He acknowledges that politics can change rapidly, but with no more debate schedules, Harris's chances of changing course have diminished because Trump often has the upper hand in interviews and rallies.
Johnston said, 'Overall, there seems to be little opportunity to change the current momentum in favor of Trump.'
Johnston said that a Trump victory will benefit domestic businesses in the USA by lowering tax rates, increasing tariffs, reducing regulations on small businesses, etc. These factors will boost investors' confidence and encourage them to shift more towards riskier and underperforming small cap stocks.
Johnston stated that even if Harris wins, these macroeconomic conditions will still lead to small cap stocks outperforming large cap stocks, as the market has not priced in the possibility of a Trump victory too much.
At the time Johnston made the above remarks, others warned that market uncertainty is looming ahead of the upcoming presidential election. With polls showing both sides' support still close, some predict that once the voter outcome is determined, market volatility will ease.
