Obviously, the rally continues.
For those watching closely, what’s notable is that the laggard small caps have been surging and taken the lead.
Until recently, their “corrective” move higher has kept bears optimistic, warning that Russell would lead the crash due to its weak relative performance.
It now appears to be expectations for lower rates, that’s taking the pressure off CRE valuations and unrealized losses that regional banks had been facing.
But a variety of other subsectors are also tagging along.
Yet various commentators are still claiming that a Q4 recession is baked into the cake.
But they keep shoving that horizon out, Q by Q. Just like the carrot on the pole.
If (or when) that DOES take hold, offices won’t refill and exposed banks will reverse course, leading it all down.
So watch KRE and IYR for clues. Then IWM. Its loaded with smaller banks.