Small-Caps Fueled by Investors’ Search for Growth

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June 10 (Bloomberg) -- Bloomberg's Scarlet Fu and Joseph Ciolli examine the recent strength in small-cap stocks. They speak in "On The Markets" on Bloomberg Television's "In The Loop."

First of all, why are we seeing the recent strength in small caps?

Are they making a comeback?

It is true between march and mid-april, it is about eight percent.

We us a it come back here it below tried to figure out where the death valuation needs to be -- where the exact valuation needs to be.

Small caps are a good way to play that.

We have seen a lot of m&a activity parity a lot of the big companies.

The goal, and right now the companies will grow their businesses what they have the upside.

Qwest is there talk for investors that they will grow organically or the -- or do they have to buy that growth?

People are encouraged the signs they are going up and any money to bolster their business, taking risks on valuations.

Trying to grow to full point acquisitions.

Qwest that was a distinction.

Mega caps are relying on overseas markets.

The small caps are domestically focused.

A are much more reliant on retail investors because of their size.

It is harder for investors to take out a big investment.

There are more in the hands of the retail investors then people were looking growth and upside.

That is what the area of the stock market is offering them.

It is made up of every sector.

Some are more well represented than others.

But the biggest worship is financials.

The component is technology and these stocks, there is no surprise, the selloff we saw from march and april.

A similar selloff in technology.

The 2000 stocks only make up roughly 10% of the overall index.

You do nothing about that.

Qwest yes.

In terms of influence it has on the market here it less when you talk to investors and analysts out there, what are they a in terms of the likelihood of correction?

We're always looking around the corner for the other shoe to drop.

I was talking about this last week and he was telling me we will not in correction of 10% or more.

The market just does not have a huge correction like that unless something wrong death prompted.

It is a bad reason to sell a stock to say, it has gone high.

Record highs in the last week there in we could see three or four percent correction and maybe the occasional hit.

For 10%, we would have to see something pretty substantial.

That could be the rate hikes next year.

Qwest thank you so much there at on the markets once again in 30 minutes.

"market makers those quote is up next.


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