We've talked about the bounce back in stocks, from what looks like a relatively shallow technical correction (7% in the S&P 500 index).

 

As we discussed, shallow corrections are a sign of strength in a bull market. 

 

What else has had a shallow correction?  

 

Gold. Silver. Copper. 

 

All are now moving back toward the highs.

 

The bull market is being fueled by the global easing cycle that's underway.  It started in Switzerland.  Sweden was yesterday.  And today the Bank of England signaled inflation getting to its 2% target this quarter, to be accompanied by a rate cut (June).

 

With an easing cycle tailwind, UK stocks are on record highs.  German stocks made new record highs today, fully recovering the April correction.  We should expect the same in U.S. stocks. 

 

And, again, that makes the laggard small caps the spot to find relative value.  The Russell 2000 (small caps) remains 15% off of the 2021 highs.