Small cap performance tied to Fed cut expectations and valuation - rallied when Fed cut probability increased, sold off when uncertainty rose

Small caps are AI innovators competing in niche markets, not going head-to-head with hyperscalers

Expects broadening of equity markets across sectors and geographies, not just US large caps

International outperformance thesis supported by fiscal expansion in Germany and Japan

Long-term focus with good market backdrop for risk assets over next year, believes Fed is cutting

Neutral on mega-cap tech/AI exposure, doesn't see AI bubble but market is finding winners and losers