2% August M2 growth and Fed interest rate cuts may boost smaller stocks over large-caps.
The recent acceleration in the U.S. money supply may signal a shift in the stock market, favoring smaller, undervalued stocks over large-cap leaders like Apple and Microsoft. With M2 money supply growth reaching 2% in August and the Federal Reserve cutting interest rates, borrowing costs decrease, potentially benefiting smaller companies. Investors may consider equal-weight index funds, such as the Invesco S&P 500 Equal Weight ETF, to capitalize on this trend.
September 29, 2024
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