SMALL CAP in bad market ??? Investors have pulled $8 billion from small-cap stocks in just two months. This pocket of the market, according to Jefferies analysts, has bled out through exchange-traded funds.
Tighter lending standards for banks — as a result of Fed rate hikes and recent bank failures — have made investors wary of what comes next for the broader economy.
Small-cap stocks, which make up just over 4% of the equity market, tend to perform worse than their larger counterparts in the run-up to a recession, which the Fed expects to begin later this year.