Francis Gannon On Asset TV’s Masterclass: Mid-Year Outlook—Royce
article 07-27-2020

Francis Gannon On Asset TV’s Masterclass: Mid-Year Outlook

Co-CIO Francis Gannon joined Asset TV’s Masterclass: Mid-Year Outlook to discuss the historical context of current volatility, the state of the small-cap market, and more.


Co-CIO Francis Gannon joined host Jenna Dagenhart and two other investment professionals on Asset TV’s Small-Cap Masterclass: Mid-Year Outlook, which aired July 22, 2020, to discuss how the current climate compares to the Great Financial Crisis, liquidity, and his outlook for small-cap stocks.

Watch Francis's appearance here.

Francis explained that he believes the current enviroment differs from the Great Financial Crisis because the latter was driven by leverage and problems within the financial sector whereas the current recession was caused by the near shutdown of the global ecnomy. He added that another key difference between the two is how quickly the Fed reacted to the pandemic.

“I think the other thing to stress is we've been through moments like this before,” he said. “It might not be the same, given the fact that this was us shutting down an economy, but we've been through moments of dislocation, we've been through recessions before, and the markets are acting the way they should. They responded to the news and they're responding to the support that it's getting from both a monetary and fiscal standpoint. I think you just have to use history as your guide here to help you out over the next year. What we're seeing, especially in the small-cap space, is exactly that. The markets are reacting the way they should in what is an environment full of a lot of unknowns.

When asked if investors are looking for safety in the right places, Francis said that many investors flocked to the biggest stocks in the Russell 1000 as a result of the equity market bottoming. He added, however, "[A]s we look out over the next three to five years, and even over the next one year, I would think that some of the more economically sensitive businesses should do better. There are pockets of strength in the midst of all this bad news,” he added.

Watch Francis's appearance here.

Learn more about Francis Gannon here.

Important Disclosure Information

The thoughts and opinions expressed in the video are solely those of the persons speaking as of June 24, 2020 and may differ from those of other Royce investment professionals, or the firm as a whole. There can be no assurance with regard to future market movements.

The performance data and trends outlined in this presentation are presented for illustrative purposes only. Past performance is no guarantee of future results. Historical market trends are not necessarily indicative of future market movements.

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