LIVE MARKETS-What's needed for small-caps to turn higher?

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WHAT'S NEEDED FOR SMALL-CAPS TO TURN HIGHER?

Small-caps have lagged large caps in the euro zone, UK and U.S. during the early part of this year, and JPMorgan believes there are factors that should see them hold up better moving forward.

"Valuations look attractive, they are underowned & have been lagging for a while, all good starting points," JPM equity strategists say.

Another thing that would be welcome would be further loosening of monetary policy, as smaller companies "prefer lower yields", JPM says, but hot inflation prints could scupper that if it constrains the ability of central banks to cut rates further, keeping yields elevated.

Meanwhile, they believe small-caps are likely to be less impacted by spiking trade uncertainty as they tend be more domestically oriented.

(Samuel Indyk)

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