Can the Russell 2000 keep up the pace? A Look At Earnings, PE

Citi Research analysts Scott Chronert and Louis L Odette provide their take on how small and mid caps are likely to fare in the dying months of 2013 in their study “Small/Mid Cap Topics – Trick or Treat?” of October 28.

Can the Russell 2000 keep up the pace?

Arguments for a likely strong finish are supported (1) by the historical tendency that a strong show during the first ten months is usually repeated during November/December, and (2) a seasonal bias in favor of positive momentum as we head into the year-end.

These ideas are tempered by the observations that trailing PEs are already at high levels, while EPS growth projections are trending lower, per the charts...