The increase in US money supply indicates a reversal of the trend towards concentration in US stocks. Small and mid-cap stocks may lead the market into a new phase of rebound

The increase in US money supply indicates a reversal of the trend towards higher market concentration in US stocks, with smaller companies potentially having an easier path to growth, leading to a new phase of market rebound. The S&P 500 index hit multiple new highs in 2024, with a cumulative increase of 15% in the first half of the year, reaching the highest level of market concentration since the 1970s. Historically, the decrease in money supply growth is related to the increase in market concentration. The US M2 money supply is starting to grow, increasing liquidity. It is expected that the Federal Reserve will cut interest rates twice this year. With the growth in money supply, smaller companies may lead the market rebound