While concerns over central bank tightening and supply chain disruptions have kept the stock market volatile, a positive report about Merck’s (MRK) pill in preventing COVID-19-related deaths has added some support. As the low-interest-rate environment is expected to prevail in the near term, it could be wise to bet on quality small-cap stocks such as Nature's Sunshine Products (NATR), Townsquare Media (NYSE:TSQ), ARC Document (ARC), and Blueknight Energy (NASDAQ:BKEP).Investors’ concerns over the Federal Reserve’s plans to tighten the monetary policy, the supply-chain disruption, and the likely increase in taxes has led to severe market volatility. In addition, consumer confidence slumped to a seven-month low in September.
However, promising data for a Merck & Co., Inc (MRK) oral treatment for the coronavirus has provided some support to the market. In August, Federal Reserve Chairman Jerome Powell indicated that “rate hikes aren’t imminent,” which should bode well for small-cap stocks. Moreover, last month, Jeff Mills, the chief investment officer at Bryn Mawr Trust, said that small-cap stocks could present the best opportunity.
Given this backdrop, it could be wise to bet on quality small-cap stocks such as Nature's Sunshine Products, Inc. (NATR), Townsquare Media, Inc. (TSQ), ARC Document Solutions, Inc. (ARC), and Blueknight Energy Partners, L.P. (BKEP). They have an overall grade of A (Strong Buy) in our proprietary POWR Ratings system.