US small-cap stocks soared 5 times in a row, surpassing NVIDIA and the S&P 500! Is this a good time to buy?

Is this a good time to buy?
Matt Miskin, co-chief investment strategist at investment management firm John Hancock, said lower interest rates could help market sectors struggling with rising interest rates due to a sharp rise in large tech stocks. For instance,Small cap stocksIt is. Because there is a high degree of dependence on fund-raisingThere is a trend that is susceptible to interest ratesIt's because of it.

Also, Mandy Xu, who is in charge of derivatives market intelligence at the Chicago Board Options Exchange (Cboe Global Markets), stated that demand for call options related to the Russell 2000 Index and exchange-traded funds (ETFs) linked to it has increased rapidly in recent sessions, and these contracts are traded at a premium against puts.

This isThere is room for short-term gains in small-cap stocksIt suggests.

He pointed out that a similar pattern was seen in the latter half of 2023, and stocks expected to benefit from the rapid cut in interest rates by the Federal Reserve were boosted by investors. According to FactSet data, Russell 2000 rose more than 20% from early November to early December last year, surpassing the S&P 500 and the Nasdaq Composite Stock Index.

risks
Janney Montgomery Scott's Dan Wantrobski said that one of the biggest questions about market movements in the front market is that this is a trend over the past year and a halfIs it a reversal or just a testI pointed out that it is or not.

He said, “Technically, yesterday's movementsThere is no certainty that this is the beginning of a sustainable long-term trend. However, from the viewpoint of trading trends, since technical charts continue to show the possibility of average regression, it is thought that further rotation of trading themes for small and medium stocks will continue in the short term.”