In the world of finance, small caps, regional banks, and private aviation companies are making waves in the market.
According to Michael Kantrowitz, chief investment strategist at Piper Sandler, investors should be cautious when it comes to small caps. Kantrowitz believes that the recent surge in the Russell 2000 is a knee-jerk reaction and warns that buying low-quality and risky assets could lead to earnings misses during the upcoming earnings season. Instead, he suggests looking into sectors such as utilities or emerging markets for better opportunities in the current macro environment.
On the other hand, regional bank stocks are on the rise, with the SPDR S&P Regional Banking ETF experiencing its best one-day advance since March. The ETF climbed 4.21% on Thursday, fueled by factors such as a better inflation report, a bond market rally, and a less inverted yield curve. Individual banks like Eagle Bancorp, Brookline Bancorp, and Valley National Bancorp also saw significant gains, outperforming the broader market benchmarks.
Meanwhile, private aviation company Wheels Up saw its shares surge more than 20% as the Russell 2000 index jumped nearly 3.6%. The company, which provides on-demand private flight services, is also on track for its best month ever with a 111% gain in July. Delta Air Lines, the largest shareholder of Wheels Up, holds 38% of its shares as of the end of March.
Overall, the stock futures opened little changed on Thursday, setting the stage for an interesting day in the financial markets. Investors will be keeping a close eye on these sectors as they navigate through the current economic landscape.
