A solid start to the third-quarter earnings season has made the stock market bullish lately. Investor sentiment has been further bolstered by the expected passage of infrastructure bills in Congress soon. These factors, along with the continuing low-interest-rate environment, we think make the backdrop favorable for mid-cap stocks. Therefore, fundamentally sound mid-cap stocks of Compañía Cervecerías Unidas (CCU), Piper Sandler (PIPR), and Newmark Group (NASDAQ:NMRK) could be solid bets now. Read on.October proved to be the best month for investors in some time. The S&P 500 rose 6.9% for the month, registering its best gain since November last year, owing to impressive third-quarter earnings reports from several companies. The expected passage of a $1.75 trillion human infrastructure bill soon, along with the anticipated passage of a $1 trillion traditional infrastructure spending bill, has contributed to the bullish market sentiment.
Mid-cap stocks tend to perform well when the economy exhibits growth potential, interest rates are low, and the stock market shows bullish tendencies. Investors’ interest in mid-cap stocks is evident in the SPDR S&P MIDCAP 400 ETF Trust’s (MDY) 47% returns over the past year versus the broader SPDR S&P 500 ETF Trust’s (SPY) 40.6% gains.
Given this backdrop, we think it could be wise to add fundamentally sound mid-cap stocks Compañía Cervecerías Unidas S.A. (CCU), Piper Sandler Companies (PIPR), and Newmark Group, Inc. (NMRK) to one’s portfolio.