'Strong Rally' in Small-Caps May Emerge
Separately, Citigroup's Chronert also highlights several positives for small-cap stocks that investors may be ignoring. He notes that, in general, the one-, three-, and six-month forward returns from such declines have been positive. However, in this environment, anything is all but certain.
"Nearer term, we expect stabilization, although the intermediate-term picture will likely remain clouded by the increased urgency to address both spending and revenue issues," Chronert writes.
-- Written by Robert Holmes in Boston.
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