FYI: As we highlighted in a prior post, when the dollar rallies, companies with domestic exposure tend to outperform their multi-national peers. Since small-cap stocks tend to have little in the way of international exposure, they tend to be a big beneficiary of dollar strength. Look no further than the relative strength chart of the Russell 2000 versus the S&P 500 over the last year. When the line is rising, it indicates that small caps are outperforming and vice versa for a falling line. While small caps were underperforming by a pretty sizable margin back in mid-February, they have completely reversed in the last three months and are now outperforming large caps by nearly their widest margin of the last twelve months. Quite a turnaround!
Regards,
Ted
https://www.bespokepremium.com/think-big-blog/small-caps-shine-in-dollars-rise/
