Capital Markets: Observations & Insights
Performance
Where to Hide from Tariffs?
• Small cap growth stocks began outperforming this year after steel and aluminum tariffs were announced, producing solid relative returns throughout the trade war rhetoric ‒ Small cap growth may be less affected than the broader market given less international exposure and more secular, as opposed to cyclical, growth drivers
Small Cap Growth Outperforms Amid Trade Tensions
Canada announces retaliatory tariffs
U.S. targeting tariffs on additional $100b of Chinese imports
110
U.S. preparing tariffs on China
EU warns of retaliatory tariffs on $300b of goods
105
Total Return
China refuses U.S. demand on trade
100
U.S announces steel & aluminum tariffs
Mexico announces retaliatory tariffs
Russell 2000 Growth / S&P 500
95
Dec-17
Jan-18
Feb-18
Mar-18
Apr-18
May-18
Jun-18
Source: FactSet, StreetAccount, and Alger.
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