Small-cap stocks will continue to outperform the larger caps as we move through 2024.
That’s according to Craig Johnson, managing director and chief market technician at Piper Sandler, who was interviewed on Tuesday on Benzinga’s PreMarket Prep show.
“Small caps are currently outperforming everything — the Mag7 and the large caps — since the end of November,” said Johnson.
The “Mag7,” short for the so-called “Magnificent Seven," is a nickname for big-name stocks like Apple Inc., Amazon.com, Inc., Alphabet Inc., Meta Platforms, Inc., Microsoft Corp., NVIDIA Corp., and Tesla, Inc.
The Russell 2000 index jumped more than 6% in just two days following last week’s Federal Reserve meeting. Investors have welcomed the likelihood of interest rate cuts in the first half of 2024.
The index, which is tracked by the iShares Russell 2000 ETF (NYSE:IWM), has traded within a band, and meeting upside resistance at the 2,020 level for 20 months. It currently sits at 2,016.