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 overall earnings expectation for small cap companies according to the discussion?

How have the valuations for small cap stocks changed recently?

What is the speaker's view on the economic forecast for the second half of the year?

What concerns does the speaker express regarding the earnings growth in the second half of the year?

What warning does the speaker give to investors in small and midcap stocks?