Investing.com — Small caps are lagging the broader market month so far in October, however are poised to proceed to rack up positive aspects amid ongoing U.S. financial progress and fading elections dangers, Wells Fargo mentioned in a Thursday word.
“Small cap outlook bettering with GDP, absorption of upper charges, and fading election threat,” Wells Fargo mentioned.
Economists anticipate GDP for 2025 to 2026 at 1.9% and a couple of.0%, respectively, however Wells Fargo believes the “potential for upward GDP revisions is critical,” paving the best way for small caps to proceed progress no matter who wins the race to the White Home.
“This dynamic could hold us within the [small cap] commerce close to time period even with a Harris victory,” Wells Fargo mentioned forward of the Nov. 5 election.
The newest odds from betting markets put Trump forward of Harris at 63% to 37%.
Historical past can also be on the aspect of small caps. Small caps outperformed within the three months after each the Trump 2016 and Biden 2020 wins, Wells Fargo mentioned. “Long term, each administrations have been good for Progress shares.”
