Bank of America Cautious on Small Caps

The video discusses the current state of small cap stocks, highlighting their attractive valuations compared to large caps, despite being in an earnings recession. It explores the impact of trade wars and geopolitical risks, which have negatively affected small caps due to their role as suppliers to multinationals. The narrowing gap between domestic and international exposure is also examined. The video concludes with a focus on profitability trends, noting that many small caps lack earnings, emphasizing the importance of selecting stocks with strong balance sheets.

What factors contribute to the cautious outlook on small caps in the near term?

How do relative valuations for small caps compare to large caps according to the text?

What are the implications of the earnings recession for small caps as mentioned in the text?

What reasons are given for the underperformance of small caps despite their domestic focus?

Discuss the impact of global macro data on small caps as highlighted in the discussion.