Amid worries of aggressive interest rate hikes by the Federal Reserve, surging inflation, and slowing economic growth, the stock markets have experienced a relentless sell-off recently. The Nasdaq Composite is in bear market territory, down 28.8% from its high, while the S&P 500 and the Dow Jones Industrial Average have lost 16.6% and 12.2% year-to-date, respectively.
However, the market correction has led to several quality stocks currently trading at significant discounts. According to Morningstar’s measures, small-cap stocks began May about 21% undervalued. Moreover, David Kelly, the chief global strategist at J.P. Morgan Asset Management, said small-cap stocks could do well as he thinks the economy can avoid a recession.
