1-15-26 Market Rotation Is Broadening — But Risks Remain

Описание: Markets are quietly broadening beneath the surface. While mega-cap stocks continue to dominate headlines, money is rotating into small caps, mid caps, value stocks, and even international equities. The S&P Equal Weight Index just set a new all-time high—even as the S&P 500 lagged—highlighting improving market breadth.

Small caps and mid caps have closed part of their long-standing performance gap with large caps, but meaningful differences remain. The Russell 2000 and S&P 600 are still trailing the S&P 500, and small caps remain highly sensitive to economic slowdowns. Roughly 40% of the small-cap universe is unprofitable, making today’s valuation enthusiasm especially vulnerable if growth expectations disappoint.

Value stocks, defensive names, and select international markets are participating, suggesting this rally is not as narrow as many headlines imply. However, rotation does not eliminate risk—it shifts it. Investors should be cautious chasing economically sensitive areas at elevated valuations and remain disciplined with diversification, rebalancing, and risk management as market leadership evolves.

Hosted by RIA Chief Investment Strategist, Lance Roberts, CIO
Produced by Brent Clanton, Executive Producer
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