Mounting debt will be a big problem for already underperforming small caps. This is a natural consequence of the increasing market concentration. This is not very alarming for consumer companies but I would avoid small cap tech stocks that require huge capex. Their innovation spaces will likely be dominated by the mega caps.
Thanks for your comments. Small caps are most vulnerable in recessions although we are still not getting one here in the US. So if things slow down enough and inflation does resume its mom down trend, Fed will probably start cutting, which provides some relief for small caps and businesses that need to roll over their loans!
I’m all caught up now! Great read to start my Sunday!
Glad to have you here, @MarketLab!
Mounting debt will be a big problem for already underperforming small caps. This is a natural consequence of the increasing market concentration. This is not very alarming for consumer companies but I would avoid small cap tech stocks that require huge capex. Their innovation spaces will likely be dominated by the mega caps.
Thanks for your comments. Small caps are most vulnerable in recessions although we are still not getting one here in the US. So if things slow down enough and inflation does resume its mom down trend, Fed will probably start cutting, which provides some relief for small caps and businesses that need to roll over their loans!