Small-cap indices showed relative strength, with Russell 2000 gaining 1.9% this week. Investors see this as a sign to diversify by investing in business ventures with higher domestic exposure, mitigating global economic risks. I like Ares Capital's business model. It's the largest publicly traded business development company (BDC). The market opportunity for BDCs is growing as banks consolidate and more borrowers turn to direct lending because it's quicker and easier to close transactions. This indicates these product lines are not only here to stay, but are so universally adopted by businesses and individuals alike that it'll be nearly impossible to dethrone them anytime soon. Stock market breadth improved, with 68% of NYSE-listed companies closing above their 50-day moving average. Investing in business tied to consumer discretionary sectors remains attractive as retail spending data comes in stronger than expected.
