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What’s driving the rotation into small-cap stocks?Video

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Transcript Browser Title: Video transcript: What’s driving the rotation into small-cap stocks?

Description: There’s been a recent surge in small-cap stocks. What’s causing it, and what does it means for investors?

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Length (seconds): 95

Transcript: <h2>Note:</h2> <p>Background music plays.</p> <h2>On screen:</h2> <p>This video opens on a woman in a short-sleeved sweater, speaking from an office with a bookshelf.</p> <h2>Note:</h2> <p>A bold disclaimer appears in a text box:</p> <h2>On screen:</h2> <p><strong>INVESTMENT AND INSURANCE PRODUCTS:</strong></p> <ul> <li><p><strong>NOT A DEPOSIT</strong></p> </li> <li><p><strong>NOT FDIC INSURED</strong></p> </li> <li><p><strong>NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY</strong></p> </li> <li><p><strong>NO BANK GUARANTEE</strong></p> </li> <li><p><strong>MAY LOSE VALUE</strong></p> </li> </ul> <h2>Elyse Ausenbaugh:</h2> <p>Here are your Top Market Takeaways.</p> <h2>On screen:</h2> <p>A circle with a title expands:</p> <h2>On screen:</h2> <p>Top <strong>MARKET TAKEAWAYS</strong></p> <h2>On screen:</h2> <p>An identifying text box appears over the speaker:</p> <h2>On screen:</h2> <p><strong>ELYSE AUSENBAUGH</strong></p> <p>Head of Investment Strategy</p> <p>J.P. Morgan Wealth Management</p> <p>July 19, 2024</p> <h2>Elyse Ausenbaugh:</h2> <p>It's the dog days of summer: The weather is hot, and so is the stock market – the S&amp;P 500 has seen a string of record highs and has climbed nearly 20% so far year-to-date.</p> <h2>On screen:</h2> <p>Text appears beside her: 'S&amp;P up nearly 20% year-to-date.'</p> <h2>Elyse Ausenbaugh:</h2> <p>Every investor wants to know: Can the rally continue? We think it can, and we're counting on corporate earnings growth to keep the market moving higher – here's what to watch for as the second quarter earnings season ramps up.</p> <h2>On screen:</h2> <p>A question appears over gray: 'What are expectations heading into earnings season?'</p> <h2>Elyse Ausenbaugh:</h2> <p>Despite some nervousness about slower economic activity data throughout the second quarter, consensus is entering the reporting season with S&amp;P 500 earnings growth expectations around 9%. That's well-above the long-term average earnings growth of just over 7% and would mark the 4th consecutive quarter of accelerating growth.</p> <h2>On screen:</h2> <p>Another question appears over gray: 'Is market strength limited to specific sectors?'</p> <h2>Elyse Ausenbaugh:</h2> <p>It's not just a few pockets of the market that are expected to see earnings upside –</p> <h2>On screen:</h2> <p>A horizontal bar graph appears, titled, 'Sector Snapshot: 2Q24 Earnings Expectations, % year-over-year change in Earnings Per Share based on consensus estimates.' The vertical axis lists, from top to bottom: S&amp;P 500, Communication Services, Health Care, Information Technology, Utilities, Financials, Consumer Discretionary, Energy, Real Estate, Consumer Staples, Industrials, and Materials. The horizontal axis ranges from negative 15% to positive 20%. The tan S&amp;P 500 bar reaches 9%, while the next eight data bars are blue. Communication Services reach 19%; Health Care 17%; Information Technology 16%; Utilities and Financials 10%; Consumer Discretionary 7%; Energy 5%; and Real Estate 2%. The next three data bars are purple with Consumer Staples at negative 1%; Industrials at negative 4%; and Materials at negative 10%.</p> <h2>Note:</h2> <p>Small text below the graph reads:</p> <h2>On screen:</h2> <p>Source: FactSet. Based on expectations as of July 10, 2024.</p> <h2>Elyse Ausenbaugh:</h2> <p>In fact, eight of the S&amp;P 500's 11 sectors are anticipated to grow earnings, and five of them could see growth above 10%! AI seems likely to remain a key theme, but we'll be looking for other signals as well – like how demand and inventories are faring, plans for new rounds of stock buybacks, and how attitudes towards inflation risks may be shifting.</p> <h2>On screen:</h2> <p>Here three points appear beside her in a bulleted list surrounded by a gray text box:</p> <h2>On screen:</h2> <p><strong>Earnings Signals</strong></p> <ul> <li>Demand &amp; Inventories</li> <li>Stock buybacks</li> <li>Attitudes towards inflation risks</li> </ul> <h2>On screen:</h2> <p>Another bulleted list appears below a title with a magnifying glass:</p> <h2>On screen:</h2> <p><strong>KEY TAKEAWAYS</strong></p> <ul> <li>There could be further upside in the S&amp;P 500 if companies deliver on the earnings front</li> <li>Themes like AI seem poised to maintain a strong presence, but better-than-expected results from other companies could help the rally broaden.</li> </ul> <h2>Note:</h2> <p>Small text below reads:</p> <h2>On screen:</h2> <p>The price of equity securities may rise or fall due to the changes in the broad market or changes in a company's financial condition, sometimes rapidly or unpredictably. Equity securities are subject to 'stock market risk' meaning that stock prices in general may decline over short or extended periods of time.</p> <h2>Elyse Ausenbaugh:</h2> <p>To learn more, please visit chase.com/theknow</p> <h2>On screen logo:</h2> <p>A logo appears over gray: J.P. Morgan WEALTH MANAGEMENT.</p> <h2>On screen:</h2> <p>To learn more, visit chase.com/theknow</p> <h2>Note:</h2> <p>Legal disclaimers.</p> <h2>On screen:</h2> <p>All market and economic data are sourced from Bloomberg Finance L.P. and FactSet unless otherwise stated.</p> <p>The views, opinions, estimates and strategies expressed herein constitutes the speaker's judgment based on current market conditions and are subject to change without notice, and may differ from those expressed by other areas of J.P. Morgan. This information in no way constitutes J.P. Morgan research and should not be treated as such. You should carefully consider your needs and objectives before making any decisions --including whether the services, products, asset classes (e.g. equities, fixed income, alternative investments, commodities, etc.) or strategies discussed are suitable to your needs. You must also consider the objectives, risks, charges, and expenses associated with any investment or financial service, product or strategy prior to making an investment decision. For additional guidance on how this information should be applied to your situation, you should consult your advisor.</p> <p>Investing in securities involves market risk, including possible loss of principal, and there is no guarantee that investment objectives will be achieved.</p> <h2>Note:</h2> <p>A disclaimer in bold reads:</p> <h2>On screen:</h2> <p><strong>Outlooks and past performance is not a guarantee of future results.</strong></p> <h2>Note:</h2> <p>The final disclaimers in regular font read:</p> <h2>On screen:</h2> <p>Asset allocation/diversification does not guarantee a profit or protect against loss.</p> <p>J.P. Morgan Wealth Management is a business of JPMorgan Chase &amp; Co., which offers investment products and services through (in bold) <strong>J.P. Morgan Securities LLC</strong> (JPMS), a registered broker-dealer and investment adviser, member FINRA and SIPC. Insurance products are made available through Chase Insurance Agency, Inc. (CIA), a licensed insurance agency, doing business as Chase Insurance Agency Services, Inc. in Florida. Certain custody and other services are provided by JPMorgan Chase Bank, N.A. (JPMCB). JPMS, CIA and JPMCB are affiliated companies under the common control of JPMorgan Chase &amp; Co. Products not available in all states.</p> <p>Copyright {{copyrightCurrentYear}} JPMorgan Chase &amp; Co.</p>

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