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Mega-cap tech stocks dominated the stock market in 2023, but that could change in 2024.
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Morgan Stanley told investors to expect sharp outperformance from small-cap stocks next year.
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“There could be a much more sustainable relative trade away from quality and toward small caps.”
Mega-cap tech giants have dominated the stock market throughout 2023, but the torch could be passed to small-cap stocks in 2024, according to a recent note from Morgan Stanley.
A team of analysts led by Mike Wilson said that while small caps tend to underperform both before and after the Federal Reserve cuts interest rates, this time could be different.
“If the earlier than anticipated dovish shift in the context of a still healthy economic backdrop can drive a cyclical rebound in nominal growth next year, small caps likely look compelling over a longer investment horizon,” Wilson said….
