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These Small-Cap Stocks Are Making A Comeback In 2024

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Good morning,

The rising price of eggs became a focal point for Americans amid high inflation. But one of the fastest-growing small cap companies in the U.S. is Vital Farms, which sells some of the most expensive eggs in any given supermarket.

Its stock has more than doubled in the last year, earning the No. 2 spot on Forbes’ list of America’s Most Successful Small-Cap Companies.

Small-caps are making a comeback in 2024, with the Russell 2000 index up 17% this year, though it still lags the S&P 500. The rally accelerated after the Federal Reserve cut interest rates in September, and investors hope small companies will benefit from President-elect Donald Trump’s policies—while also being less vulnerable to proposed tariffs.

FIRST UP

President-elect Donald Trump’s pick for Treasury secretary devolved into a semi-public ordeal over the weekend, with Elon Musk and RFK Jr. signaling support for Howard Lutnick, more names added to the running and a reported invite to Mar-A-Lago, but one vocal contender is still longtime hedge fund executive Scott Bessent. Over his lifetime, Bessent has built relationships with some of the world’s wealthiest investors and most influential policymakers, from liberal billionaire George Soros (for whom he worked twice) to one of Saudi Arabia’s wealthiest families to the late Japanese Prime Minister Shinzo Abe.

Major stock indexes ended a losing week Friday, as the Trump-inspired stock market rally dried up and investors heeded concerns about more hawkish monetary policy. A tech selloff sent the market capitalization of the U.S.’ six most valuable companies—Nvidia, Apple, Microsoft, Amazon, Alphabet and Meta—down $458 billion Friday.

BUSINESS + FINANCE

A federal judge in Texas permanently blocked a rule from President Joe Biden’s administration that expanded overtime protections, eliminating one of the highest-profile Labor Department rules enacted during his term. The rule would have made about 4 million more salaried workers eligible for overtime pay by raising the salary threshold for eligibility, according to the Labor Department, but the judge ruled the department went beyond its authority.

WEALTH + ENTREPRENSHIP

The last two years of the Biden Administration have been blissful for stock investors. While many voters seemed to believe President-elect Donald Trump would be better for their wallets, his campaign promises—including tax cuts and trade tariffs that would, per a budget watchdog, add $7.8 trillion to the national debt over 10 years—might well have the opposite effect. It could be time to buckle up and hang on to the gains you have, and our post-election investment guide is here to offer advice.

Shares of Rocket Lab USA closed at an all-time high Friday, boosting the fortune of the firm’s founder and CEO Peter Beck to an estimated $1 billion for the first time, Forbes estimates. The company, which develops and launches rockets, satellites and other spacecraft, has seen its stock soar by more than 300% over the last year, and Beck sees it as a competitor to Elon Musk’s SpaceX.

MORE: As Musk takes on more influence in government with Trump’s win, SpaceX’s second-in-command voiced her support for regulatory reform Friday, calling for more competition in the space industry. “Regulation in the United States—and globally, with the exception of maybe China—is slowing technology down,” SpaceX President and COO Gwynne Shotwell said at the 2024 Baron Investment Conference in New York City.

MONEY + POLITICS

ARC Global Investments and its founder Patrick Orlando have offloaded nearly their entire stake in Trump Media & Technology Group and are no longer major shareholders in the Truth Social parent, according to a recent regulatory filing. It’s the latest stakeholder in the company to unload or sell their shares, including Trump Media’s director, general counsel and CEO.

SPORTS + ENTERTAINMENT

Spanish tennis ace Rafael Nadal is retiring after the Davis Cup tournament, 25 years after he signed his first major endorsement deal. Over that quarter-century, Nadal has been more successful than just about anyone who has ever picked up a tennis racket, earning more than $550 million in total pretax earnings, according to Forbes estimates.

TRAVEL + LIFESTYLE

Looking for a wellness escape or city-center retreat for your 2025 vacation? The Forbes Travel Guide rounded up the 25 most anticipated hotel openings next year, from Montana to Melbourne. There’s everything from Marriott’s Edition in Italy’s Lake Como, featuring sparkling water and mountain vistas, to the whimsical Faena New York, a red beacon overlooking the High Line.

TRENDS + EXPLAINERS

Heading into 2025 with a new Congress and presidential administration, many wonder what could happen to the various provisions in the Tax Cuts and Jobs Act of 2017. The sweeping legislation made some changes permanent—like corporate tax cuts—but others are set to expire at the end of 2025, like a near-doubling of the standard deduction.

DAILY COVER STORY

Tech Darling Palantir Mints Two More Billionaires In Post-Election Surge

TOPLINE Palantir cofounder, venture capitalist and conservative think tank founder Joe Lonsdale saw Donald Trump’s reelection as president as a win for the United States. “It’s morning again in America,” read a November 5 post on X from Lonsdale, who helped raise money for Trump with Elon Musk through the America PAC. “Daddy’s home,” he wrote in another.

It’s also a win for Lonsdale. Although he hasn’t worked at Palantir since 2009, he invests heavily in software and defense companies through his venture firm 8VC and says Palantir is part of a “new prime” of defense companies that are excited about a second Trump presidency.

Thanks to a combination of growth and fervor, Palantir’s share price has shot up more than 50% since election night—which coincided with the data mining firm’s strong quarterly earnings report, where revenue from the U.S. government was up 40% and a new defense contract with the government drove the company’s quarterly revenue to an all-time high of $726 million.

Palantir’s stock price surge has made Lonsdale and his cofounder Stephen Cohen, both 42, new billionaires, Forbes estimates.

Aside from his estimated 1% stake in Palantir, worth approximately $1 billion, Lonsdale has cash from selling shares of several companies his firm has backed, including OpenGov in February, plus a stake in his defense-heavy venture capital firm, 8VC. Cohen’s billions, meanwhile, come from his 1.5% stake in Palantir plus an estimated $175 million from selling stock over the past four years.

WHY IT MATTERS “While Palantir also works with commercial customers, it has strong connections to (and generates more than half its revenue from) the U.S. government, especially the Department of Defense. A second Trump Administration appears to be more aligned with Palantir’s explicit mission to uphold Western values and defend America,” says Forbes reporter Phoebe Liu.

“Taken together, it’s especially important to understand who is profiting from this key public-private partnership and why Palantir’s perceived market value has increased so much—for reasons economic, political and otherwise.”

MORE Silicon Valley Defense Tech Can’t Wait For Trump To Get Started

FACTS + COMMENTS

Measles cases are surging around the world, which the World Health Organization attributed to inadequate vaccine coverage. The measles vaccine has “saved more lives than any other vaccine in the past 50 years,” the WHO director-general said:

10.3 million: The number of reported cases last year, an increase of 20% on 2022

107,500: The number of people measles killed in 2023, most of whom were under 5 years old

95%: The share of children that countries need to have two measles shots to prevent outbreaks of the disease and keep the population safe

STRATEGY + SUCCESS

Switching jobs has historically been a reliable strategy to earn higher pay, but new data shows the financial benefits of doing so are diminishing: The median year-over-year increase in pay for job switchers dropped to 6.2% in October, down from a pandemic-era peak of 16.4%, according to ADP. During the height of the Great Resignation, workers saw unprecedented mobility and pay gains, but the financial incentive to switch jobs appears to be dissipating in a cooler labor market. Plus, there could be long-term financial disadvantages to constantly changing jobs when it comes to retirement savings.

VIDEO

QUIZ

A new host was announced for the 97th Academy Awards next March after late-night host Jimmy Kimmel emceed four of the last eight ceremonies. Who is it?

A. Stephen Colbert

B. Kevin Hart

C. Conan O’Brien

D. Jimmy Fallon

Check your answer.

Thanks for reading! This edition of Forbes Daily was edited by Sarah Whitmire, Chris Dobstaff and Caroline Howard.

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