Silver Lining For Small Cap

The big things you need to know:

• First, Friday’s weaker than expected jobs report, which was still viewed as healthy by our economists, left us feeling incrementally better about Small Cap.
• Second, other things that jump out in our updates this week include the stall in stock market optimism among consumers in the latest Conference Board survey, recent deterioration in our earnings yield gap model, low layoff levels in the Challenger report, the stall in Democratic sweep expectations in midterm betting markets, and the expensive valuations we continue to see in Financials, Industrials, and Utilities.