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SocGen Quant Warns as Weak Balance Sheet Stocks Hit Record

  • Fragile companies grab record 11% share of small-cap index
  • SocGen team recommends shorting gauge after stratospheric rise
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Powered by the Reddit army and reflation bets, companies with the most fragile balance sheets have grabbed a record share of the U.S. small-cap market.

According to Societe Generale SA, these stocks now represent about 11% of the Russell 2000 Index, up from 6% at the end of 2019 -- making the market ever-more vulnerable in the event the credit cycle turns.