Typically it’s a warning sign for future economic growth and equity performance when:
1) US Household Survey Employment is under-performing Payrolls
2) Private sector hours worked are trending downwards; and
3) Small cap stocks are underperforming large cap stocks.
All three of those things have been true recently.
Our Weekly US tracker, meanwhile, has been slowing but not crashing. And technically speaking small cap stocks look more positive than negative in absolute terms.
What’s clear though is that small cap equities do best when optimism for rate cuts are rising… and that the Fed is in no hurry to get the process going.
