No single ticker was named. Small caps ETFs are one way for retail investors to get exposure. Not a recommendation.
Small-cap earnings recovery is just beginning
The guest argued that small-cap corporate earnings are at the start of a multi-year recovery cycle driven by a manufacturing rebound.
The argument
The spread between expected earnings for the Russell 2000 and the S&P 500 is historically wide. This shift is supported by inflecting ISM new orders and durable goods demand, which are helping non-earning smaller companies transition to profitability.
The thesis, stress-tested
✓ What validates it
- ✓ISM manufacturing index remaining in expansion territory
- ✓Russell 2000 earnings reports showing a net positive flip from non-earning to earning status
▸ Risks discussed
- ▸Unit labor costs rising faster than productivity
- ▸Manufacturing recovery stalling before full diffusion to smaller businesses
Hear it yourself
"And I could Good use of plural there. So the problem is we go to, like, we go to Kima. We go to, like, all these, like, Mediterranean restaurants, and everybody gets the grilled octopus. Yeah. You know, I used to like it a lot. But now you feel bad. Wasting away. Denise, here's where I'm at. Tell me. I don't know if this is my age or my personality. I'm now at a stage where I eat out at a restaurant, and I have no patience for the bringing of the check routine. Mhmm. Like, you have to flag somebody down. They come over. I'd like the check."
00:45