Bloomberg Intelligence's 'Equity Market Minute' 6/19/2019

The video discusses the growing valuation gap between smallcap and large cap stocks in the US market, highlighting the role of the Fed and financial sector in this dynamic. It explores the need for yield curve spread widening and stabilization in the high yield market to improve smallcap outlook. The correlation between the Russell 2000 index and high yield bond spreads is examined, emphasizing the impact of financing conditions on smallcap performance.

What is one of the main reasons for the valuation gap between small-cap and large-cap stocks?

• Increased investor interest in small caps

• Higher earnings in large caps

• Discounts in the financial sector

• Government regulations favoring large caps

What could potentially act as a catalyst for investors to increase their risk tolerance towards small caps?

• A Federal Reserve decision

• A change in government policy

• A rise in global oil prices

• A decrease in inflation rates

Which index is closely correlated with high yield bond spreads?

• S&P 500

• Dow Jones Industrial Average

• Russell 2000

• NASDAQ Composite

What is necessary for financial stocks to perform well according to the discussion?

• Yield curve spread widening

• Lower corporate taxes

• Increased government spending

• Higher interest rates

What is needed for small caps to gain momentum in the market?

• Increased foreign investment

• Improved financing conditions in spread markets

• Lower unemployment rates

• Higher consumer spending