Thanksgiving Turkeys and Year-End Rallies: A Stock Market Forecast

Stocks may face challenges until Thanksgiving as bond yields rebound, with retail investors showing reluctance to chase the recent rally. The surge in bond yields, which could reach cycle highs around 5%, particularly concerns analysts. Small-cap stocks, represented by the Russell 2000 index, are at risk due to higher interest rates. November marks the fourth consecutive month of small-cap weakness relative to large-cap stocks. While some investors consider small-caps oversold, it is advised to avoid them until there is evidence of a larger peak in Treasury yields.