Market Quote: U.S. Election Grabs Investors, A U.S. Small Cap Index Nabs Big Gains
Author: The editor's desk
July 17, 2024
A mid-week analysis of what’s happening in global financial markets from the perspective of AGF’s investment management team.
Serious Matters
U.S. elections have historically been good catalysts for equity markets, but this time could end up being very different, especially in light of the recent assassination attempt targeting former president Donald Trump. While U.S. equity markets have climbed higher this week on the premise that Trump may win the election in a landslide, it’s reasonable to believe that more volatility associated with the presidential race is in store.
Clearly the country is in a crisis. And given how close the race between Trump and President Biden was before the shooting, a contested outcome in November, while less likely at the moment, should not be completely ruled out. Nor should the prospect of even more civil unrest breaking out in the days, weeks and months ahead.
Size Matters
The Russell 2000 Index that makes up the smallest 2,000 U.S. stocks in the Russell Index, has gained more than 10% since July 9 to vastly outperform its large-capitalization counterpart, the Russell 1000 Index, which has climbed less than 1% over the same period.
The move was likely precipitated by growing expectations of a rate cut by the U.S. Federal Reserve later this year, yet time will tell whether this recent outperformance is the beginning of a much-anticipated rotation in market leadership that could favour small caps over large caps going forward.
About AGF Management Limited
Founded in 1957, AGF Management Limited (AGF) is an independent and globally diverse asset management firm. Our companies deliver excellence in investing in the public and private markets through three business lines: AGF Investments, AGF Capital Partners and AGF Private Wealth.
AGF brings a disciplined approach, focused on incorporating sound, responsible and sustainable corporate practices. The firm’s collective investment expertise, driven by its fundamental, quantitative and private investing capabilities, extends globally to a wide range of clients, from financial advisors and their clients to high-net worth and institutional investors including pension plans, corporate plans, sovereign wealth funds, endowments and foundations.
Headquartered in Toronto, Canada, AGF has investment operations and client servicing teams on the ground in North America and Europe. AGF serves more than 800,000 investors. AGF trades on the Toronto Stock Exchange under the symbol AGF.B.
For further information, please visit AGF.com.
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