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Next Big Thing: Small Caps?

Posted January 24, 2024

Matt Insley

By Matt Insley

Next Big Thing: Small Caps?

It’s official: Donald Trump won the New Hampshire primary, beating Nikki Haley by a margin of 43% to 32.5%. 

It’s one more data point in support of Jim Rickards’ election thesis — one he shared on our YouTube channel in an interview that’s already garnered a half-million views…

Although the video was released Dec. 1, 2023, the content is still relevant

Be sure to give it an airing if you haven’t already. 

Moving on…

Send your opinions to, feedback@newsyoucanacton.com

Your Rundown for Wednesday, January 24, 2024...

If History Rhymes

Small-cap stocks may be ready for a major upswing, if historical patterns repeat. 

As Sean Ring noted yesterday at The Rude Awakening, the Russell 2000 index of small-cap stocks — with under $2 billion in market capitalization — appears to be poised for gains.

Last fall, Sean identified the $161-162 level as a crucial benchmark for the iShares Russell 2000 ETF (IWM). Falling below that, he said, would spell trouble for the whole stock market. 

But IWM bounced to $168 in late October, signaling the start of the market's huge November-December rally.

Now IWM trades around $195. However, chart analyst Charlie Bilello points out that while the S&P 500 has hit all-time highs, the Russell 2000 remains about 20% below its own record peak. 

If small caps play catch-up, as they have after past recessions, Sean argues investors could see impressive returns.

Over the past 40 years, there have been only three instances when the S&P 500 hit all-time highs while the Russell 2000 lagged around 20% below its own peaks: January 1985, February 1991 and April 1999.

However, history suggests this is not an ill omen for small caps. In all three cases, the S&P 500 went on to rally over the next 12 months, while the Russell 2000 surged even higher.

For example, in April 1999 with the dot-com bubble in full swing, the S&P rose 14.3% the next year. Meanwhile, the Russell 2000 index rocketed 36.5% over that same period.

“If I were a betting man,” Sean says, “I'd suggest that this situation will resolve like the one in 1999.” 

Of course, past performance does not guarantee future results. But the historical precedent is notable.

Market Rundown for Wednesday, Jan. 24, 2024

The S&P 500 is up 0.50% to 4,885. 

Oil is up 0.60% to $74.80 for a barrel of WTI. 

Gold is up 0.30% to $2,032 per ounce. 

And Bitcoin is up 2% to $40,000. 

Send your comments and questions to, feedback@newsyoucanacton.com

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