Russell Rut: Russell and Recession

russell rut: Month-to-date, the Russell 2000 has risen 6.4%, while the S&P 500 has advanced 2.4%, as of Monday's close, according to Market Watch. Recession fears that were overblown in August have receded, and no recession helps small caps even more than large, Steven DeSanctis, equity strategist at Jefferies told Market Watch. Since Aug 31 of 2018, the small-cap Russell 2000 RUT, -0.63% index has fallen more than 9%, compared to a rise of 3.6% for the large-cap S&P 500 index SPX, 0.03%, but in September, the Russell's fortunes began to turn around, and there's now reason for cautious optimism that a rally in smaller-company stocks is here to stay. DeSanctis pointed to rising bond yields as evidence that the market believes the U.S. economy will avoid a recession next year, but also predicted that the Russell 2000 will benefit from a Federal Reserve interest rate cut for the second time this year at the conclusion of the central bank's meeting Wednesday. If housing improves due to lower rates, small caps should benefit way more than large. An aggressive Fed should help the backdrop for small caps, as they have outperformed in the past after rate cuts, DeSanctis wrote in a recent research note. (news.financializer.com). As reported in the news.