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Goldman Sachs Says U.S. Small Caps Are Set to Lag Larger Peers

  • Tightening financial conditions among headwinds Goldman cites
  • Small-cap outlook also has wider market import for Evercore

Goldman Sachs Group Inc. strategists have a message of caution for investors tempted by signs of stabilization in beaten-up U.S. smaller company stocks.

Tightening financial conditions, slowing economic growth and a flattening Treasury yield curve are all likely to “pressure” returns from the Russell 2000 index relative to the S&P 500 gauge, a team led by David Kostin wrote in a note, citing in part forecasts from Goldman’s economists.