Asks if small cap stocks are finally 'all grown up' and here to stay, or if it's another head fake.
speaker1
Larry Adam
We are neutral on small caps. For the last four years, consensus has looked for small cap outperformance based on earnings, but their earnings estimates have been revised down more than 10% each year.
Asks if there are larger concerns about the rally this year, or if the market will just shake off headlines and continue to new highs on positive reports from semis and banks.
speaker1
Larry Adam
We are a little bit more cautious this year. Consensus looks for S&P at 6700, we are at 7250. Fundamentals are healthy with above-average earnings growth and likely Fed cuts.
Asks if he would be a buyer of weakness in Visa, Mastercard, or banks on negative policy news, like the president's healthcare plan, viewing it as midterm posturing and a chance to buy at a discount.
speaker1
Larry Adam
Would be a buyer of technology if something drives it lower. More cautious with financials as good news is priced in, so neutral there.
Asks for clarification on views about financials and healthcare.
speaker1
Larry Adam
We are overweight healthcare. Headlines have weighed on it, but pricing deals with pharmaceutical companies have been signed without earnings being revised lower—they've started to be revised higher.