Small caps have been one of the hottest corners of the markets in the wake of President-elect Donald Trump’s election victory four weeks ago. But now there are signs of trouble in paradise, potentially capping future gains.
“The concern with small- and mid-cap stocks right now is that while there is a change in sentiment because of Trump, earnings growth is still not good and we’re seeing downward [earnings] revisions for next year,” Andrew Krei, co-chief investment officer at Crescent Grove Advisors, told CNBC.
“Small caps right now are a trade, not a fundamental move,” Krei added.
CNBC Pro subscribers can read the full article here.