Russell 2000 is where the party is at now

Earn While You Learn! ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ [EARN WHILE YOU LEARN! JOIN OUR FREE LIVE TRADING SESSION!]( Hello investor, Russell 2000 is where the party is at now The Russell 2000 has been red-hot. The small-cap index crushed the Nasdaq 100 by almost 12% for the first time since 2011. What’s more, the equal-weighted S&P 500 outperformed the regular index. What does this say? Other sectors are starting to rally, just as Big Tech companies begin to pull back a little bit. Wall Street believes that an interest rate cut is virtually guaranteed in September, so many sectors might benefit from it. - “Rotation is the name of the game,” said Andrew Brenner at NatAlliance Securities. “This is consistent with the increased perception of cutting rates.” (Source: Bloomberg) Listen, non-tech sectors struggled in the previous quarters. Their earnings growth was negative. However, Big Tech companies kept growing to keep the rally going. Things are starting to turn around with non-tech sectors being expected to report a positive growth during the current earnings season. If the Federal Reserve is able to pull off a soft landing, it will boost the chance of other sectors to accelerate their earnings growth. Speaking of a soft landing, we got new retail sales data yesterday. Economists expected a decline, but the actual data showed a positive growth of 0.8% (excluding spending at gas stations and on cars). Sales at home improvement stores were solid at +1.4%. At the same time, brands continued to warn about a pullback in consumer spending. Take Helen of Troy as an example. It is the company behind Vicks, Braun, and Revlon, and CEO Noel Geoffroy said last week that “consumers are even more financially stretched and are even further prioritizing essentials over discretionary items.” He also added that “traffic overall is slower throughout the country and promotional pressure is increasing.” PepsiCo also reported that it noticed “tighter household financial conditions.” Conagra Brands (the company behind Slim Jim beef jerky and Vlasic pickles) expected lower profits for the current fiscal year. We are still early in the earnings season. Big banks have reported solid results. Wall Street is eager to see how other sectors perform in the recent quarter, so investors can determine if the current rally is justified. Top Pick to Bet on the Comeback of Smaller-Cap Stocks Today’s Stock Pick: Fiverr International Ltd. (FVRR) One of the best indicators of a monster stock is whether the company is the “category leader.” First-movers often have the advantage which is difficult to penetrate. For example, WeWork is the category leader in coworking spaces. Airbnb for home rentals. Uber for ridesharing. And so on. Fiverr is the category leader in a new (and huge) market of freelancing. The estimated TAM is a whopping $247 billion. What makes Fiverr unique is its e-commerce approach to the services industry. (Source: Fiverr) You could order products from Amazon with a listed price. Simple and sweet. But what if you want to order a brand logo? In the past, you will need to post a job, interview candidates, and go through all of that headaches. With Fiverr, you can simply purchase a service with a listed price. Imagine if you need to plan a travel. Rather than spending time on researching for your travel itinerary, you can simply purchase a service from a travel agent on Fiverr with wide-ranging price points: (Source: Fiverr.com) Cool, right? Like when e-commerce was in its infancy back in the late 1990s, the market of freelancing is very outdated. In the graph below, you will see how most of the freelancing happens offline – rather than online. You and I know that it’s inevitable for freelancing to go online due to the explosion of hybrid work models. Companies are more comfortable working with people online, and this can only boost the demand for online freelancing. (Source: Fiverr) Network effect: One of the most powerful competitive moats is the network effect. Its value increases as more people join the platform. And it would create a flywheel. If Fiverr sellers see more opportunities on the platform, more freelancers (especially higher-quality ones) will join the platform. If the buyers see the immense value of sellers, more buyers will also join the platform. This leads to more demand for services. It would eventually attract more sellers. And the flywheel continues. (Source: Fiverr) Phenomenal revenue growth: Sure enough, Fiverr is growing rapidly. Its revenue grew at an incredible pace of 36% CAGR from 2019 to 2023. (Source: Fiverr) Bottom line: Fiverr is a rare category leader that is still young. Its market cap is just $977 million, but its revenue is growing at a 36% CAGR in the last five years. The stock looks poised to bounce back if Smart Money continues to rotate into smaller-cap stocks. [EARN WHILE YOU LEARN! JOIN OUR FREE LIVE TRADING SESSION!](       © All Rights Reserved, Trade Alliance [Unsubscribe]( | [Manage Preferences](