Chart of the Day: Mid-Caps in the Driver's Seat

Mid-caps have been relative leaders and are showing more absolute strength

64% of stocks in the Mid-Cap S&P 400 have 50-day averages above their 200-day average. This is highest since September 2021 and exceeds the improvement seen among large-caps (S&P 500) and small-caps (S&P 600).

Why it matters: Mid-caps have been setting the pace since September, showing more resiliency in periods of weakness and leadership in periods of strength. We are seeing it at the stock level, we are seeing it at the industry group level, and we are seeing it at the index level (especially within Value).

The S&P 400 Value index is now 20% above its June low, and 10% above its December low. More importantly it has eclipsed its December high, which was above its August high, and is only a few percentage points shy of its all-time high. This strength is being recognized in our work. The US equity size & style model is currently allocating almost as much exposure to mid-caps as it is to large-caps (on average large-cap exposure is twice as large as mid-cap exposure).

Mid-caps are often overlooked as investors move between large-caps and small-caps. But right now, they are hard to ignore.