The Russell 2000 is not exactly an unknown index, as it is often used as a proxy for small-cap stocks, but it grabs far fewer headlines than the S&P 500, which tracks the market's 500 largest stocks. Where the S&P 500 is up 49% over the last 12 months, the Russell 2000 has risen a blistering 83%. Columbus McKinnon (NASDAQ: CMCO), the country's largest manufacturer of hoists, cranes, actuators, and other rigging tools, is primed to benefit from President Joe Biden's $2 trillion infrastructure proposal.
Ambrose Evans-Pritchard: Risks are growing but this bull run is far from over Great equity booms typically continue for a year or 18 months longer than a nervous rationalist believes possible. It is expensive to pull the trigger too soon, and even more expensive to short stocks just because they look overpriced. That way lie margin calls. A strong nerve is required to stay the course amid the crowd pathologies of a late bubble. When the end comes, it is because the US Federal Reserve has hit the brakes, or at least it has been for almost every cycle over the last century. The Fed raised interest rates by 400 basis points before the Lehman crisis, 350 points before the dotcom bust in 2000, 1,300 points during Paul Volcker’s war on inflation, and 800 points to rein in (belatedly) the “guns and butter” stimulus of the 1960s. US rates are currently zero and the Fed has signalled its intention to keep them pinned to the floor through the Biden boom. It is still buying bonds and expanding its balance sheet, even though the broad M2 money supply has risen 27pc over the last year. It is funding a third of the $3 trillion budget deficit with pure QE. It is accommodating the most radical fiscal experiment ever attempted in peace-time with the most radical monetary experiment to match. To modify a market dictum, don’t fight the Treasury and the Fed at the same time. Equities can of course roll over of their own accord once prospective price-to-earnings ratios become hyper-inflated and earnings start to disappoint. This could soon happen as the global shortage of semiconductor chips and other key components squeezes profits. But that is chiefly a story for specific stocks. Consensus US earnings forecasts (IBES) may look extreme at 27pc this year but so far they have beaten expectations. JP Morgan’s equity strategist Mislav Matejka says profit growth is typically leveraged six to seven times to GDP growth. A V-shaped economic rebound of 6.5pc this year – some say nearer 8pc – is stock market rocket fuel. “We expect another quarter where earnings releases act as a tailwind,” he said.
Let's take a look at some ETF areas that are presenting some great investment opportunities for April considering the current market scenario.