Small Caps Come Too Far, Too Fast and Here's Why

In a morning meeting, Steve Desanctis from Jefferies discusses the outlook for small and midcap companies during the earnings season. Despite a 20% rise in small cap stocks, he expresses skepticism about future growth due to stretched valuations and past economic trends. Analysts expect earnings to improve in the second half of 2016, but Desanctis warns of potential disappointments if economic acceleration does not occur.

What is the main focus of the discussion with Steve Desanctis?

• The future of large cap stocks

• The role of key banks in the financial market

• The current state of small and midcap companies

• The impact of mega caps on the economy

What is Steve Desanctis's view on the future growth of small cap stocks?

• He is optimistic about significant growth

• He believes growth will be minimal

• He is skeptical about future growth

• He expects a decline in growth

How have small cap stocks performed recently according to the discussion?

• They have remained stable

• They have increased by 5%

• They have decreased by 10%

• They have increased by 20%

What is the economic forecast for the second half of the year?

• Uncertain economic conditions

• A decline in economic growth

• Much better growth

• Stable economic conditions

What warning does Steve Desanctis give to investors in small and midcap stocks?

• Invest heavily in small caps

• Ignore current valuations

• Expect significant growth

• Be cautious of potential disappointments