Citi’s US Equity Strategist Says Firm Is ‘Incrementally More Constructive’ on Small- and Mid-Cap Equities Amid Fed Cuts and Fundamental Growth
A US equity strategist at Citi thinks market dynamics could soon begin to favor the small- and mid-cap (SMID) stocks.
Scott Chronert says in a new interview with CNBC that overall market fundamentals still appear “very solid” on the back of the artificial intelligence (AI) tailwind.
The equity strategist also argues that the SMID earnings recession is over.
“When we think of small/mid-cap, versus large-cap in particular, [they are] much more traditionally economically sensitive. Ideal time to own small-cap is coming out of a recession. We’re not there. We’re still looking at the soft-landing backdrop. But soft-landing plus lower Fed fund rates does begin to set this up.
Now, fundamentally, I’d also make the point that small/mid has been in its own form of earnings recession in the past two years. With Q2 results, we had the first positive inflection in earnings growth in that two-year timeframe, and so we’re looking at that persisting going forward.
So a combination of traditional, historic lower rate sensitivity, combined with signs that we’re turning the corner in terms of the fundamental set-up, has us incrementally more constructive on the SMID space.”
Chronert does note that Citi is reducing its exposure to communication services stock from overweight to market weight.
Generated Image: Midjourney
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
The Federal Reserve's Change in Policy and Its Impact on Cryptocurrency Markets
- Fed's 2025 policy tightening and regulatory shifts reshaped crypto markets, triggering capital reallocation and volatility amid $340B balance sheet contraction. - Bitcoin ETFs lost $3.79B in November 2025 as investors shifted to stablecoins and altcoins, driven by inflation hedging and regulatory clarity under the GENIUS Act. - Crypto-ETF performance diverged sharply, with Solana/XRP funds attracting $421M/$410M inflows while Bitcoin ETFs faced stagnation despite $22.32B net creations. - Policy uncertain
Solana's Latest Price Drop: Analyzing Systemic Vulnerabilities in Advanced Blockchain Platforms
- Solana's 2025 price drop and declining user activity, despite strong on-chain metrics, highlight systemic risks in high-performance blockchains. - Network Value to Transaction (NVT) ratio spikes and macroeconomic headwinds exposed vulnerabilities in consensus mechanisms and validator centralization. - Security breaches, regulatory uncertainties, and cross-chain bridge risks amplified downward pressure, contrasting with whale accumulation and real-world asset adoption growth. - Case studies of Avalanche a
SOL Price Forecast for 2025: Can the Altcoin Surge Last?
- Solana (SOL) gains traction in 2025 through institutional partnerships and ETFs, boosting blockchain adoption. - Despite $101.7M ETF inflows, SOL prices fell 30% by December, highlighting macroeconomic pressures over institutional demand. - Proposed inflation reduction (SIMD-0411) and short-term rallies signal resilience, but Bitcoin/Ethereum dominance complicates altcoin sustainability. - Analysts project $400–$500 SOL by year-end, contingent on resolving rate volatility and global economic uncertaintie
The BTC Collapse: Examining the Triggers and Consequences for 2026
- Bitcoin's 2026 collapse risk stems from leverage, quantum threats, and macroeconomic fragility, mirroring 2008/1929 crises. - Leverage-driven liquidation loops and corporate Bitcoin holdings create self-fulfilling price cascades across crypto and traditional markets. - Quantum computing could break Bitcoin's cryptography, while regulatory uncertainty amplifies systemic risks in its financialized ecosystem. - Historical parallels highlight recurring patterns of speculative excess and leverage, urging robu
Trending news
MoreCrypto prices
More
