Small caps are very sensible to economic conditions. The fact that almost 40% of small caps in the Russell indexes have negative earnings can be an indication that an economic #recession might be close. The Russell 2000, one of the most followed small cap index, is down 30% from its peak in November 2021. Prices follow earnings, and earnings seem to be adjusting to economic conditions. Small caps are already in a #bearmarket.
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Source: piper sandler
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