🍎 🍕 Less apples, more pizza 🤔 Have you seen Buffett’s portfolio recently?Explore for Free

Election, economic risks fading for small caps: Wells Fargo

Published 2024-10-31, 05:18 p/m
© Reuters.

Investing.com -- Small caps are lagging the broader market month to date in October, but are poised to continue to rack up gains amid ongoing U.S. economic growth and fading elections risks, Wells Fargo (NYSE:WFC) said in a Thursday note.

"Small cap outlook improving with GDP, absorption of higher rates, and fading election risk," Wells Fargo said.

Economists expect GDP for 2025 to 2026 at 1.9% and 2.0%, respectively, but Wells Fargo believes the "potential for upward GDP revisions is significant," paving the way for small caps to continue growth regardless of who wins the race to the White House. 

"This dynamic may keep us in the [small cap] trade near term even with a Harris victory," Wells Fargo said ahead of the Nov. 5 election. 

The latest odds from betting markets put Trump ahead of Harris at 63% to 37%. 

History is also on the side of small caps. Small caps outperformed in the three months after both the Trump 2016 and Biden 2020 wins, Wells Fargo said. "Longer term, both administrations were good for Growth stocks."

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.