The incoming Trump administration could create positive market conditions for both large banks and small-cap stocks. Deregulation and increased IPOs and mergers & acquisitions are expected to benefit large banks, while small-cap companies are seen as poised to thrive due to reshoring and tariffs.
The Trump administration may create powerful tailwinds for two vastly different market groups: Big banks and small cap stocks.In the case of financials, Astoria Portfolio Advisors' John Davi predicts deregulation — along with a boost in IPO and mergers and acquisitions — to spark multi-year strength.
"The funny thing about the banks is that they were actually from an earnings standpoint fundamentally getting very attractive prior to the Trump administration," the firm's founder and CEO told CNBC's"" on this week. "The large-cap money centers like Goldman , JPMorgan, Bank of America, Morgan Stanley… That's really the area you want to hone in on with this new administration.
"If we have a focus on the U.S. and making America even stronger, then small-cap companies stand to benefit from that because they have less multinational exposure," the firm's head of research said., and its mission statement is to target"quality small cap companies, trading at a discount with favorable growth prospects." Its top three holdings.
According to Rosenbluth, the ETF"takes a focus on companies with high quality, strong free cash flow generation, but it has a growth filter to it," said Rosenbluth, who added the filter sets a high bar for which small-cap stocks ultimately make the cut.
FINANCIAL MARKETS BANKING SMALL-CAP STOCKS DEREGULATION TARIFFS
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