Capital Market Outlook

IN THIS ISSUE

• Macro Strategy — Small-caps Showing Relative Strength Versus Large-caps. Time To Upgrade?: The technical backdrop for index-level investing in Small-cap stocks has improved but we still remain neutral for now and are closely watching the profits cycle.
  
• Market View — The Market Risks Of China Being the Refinery To The World: Although China's recently announced export restrictions on gallium and germanium could spark a global mad scramble for critical metals and minerals, we continue to remain constructive on hard assets.
  
• Thought of the Week — Liquidity Sufficient To Handle Sizable Treasury Bill Issuance: The level of bank reserves, which will be driven by flows from the Federal Reserve's reverse repurchase program, the Treasury General Account and Quantitative Tightening, can affect risk market sentiment.