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e're revisiting our list of top NYSE penny stocks and taking a closer look at Anywhere Real Estate Inc. (NYSE:HOUS) in this context. Small-cap companies are particularly sensitive to economic conditions and interest rates, but with the US Federal Reserve cutting rates and the economy heading for a soft landing, investors are shifting their focus towards well-positioned penny stocks that can benefit from improving macroeconomics. Citi's Scott Chronert believes small-cap stocks offer an affordable way to invest in value and generate long-term gains, citing their attractive multiples compared to large-cap peers.

    Small and mid-cap stocks have delivered strong double-digit gains over the past year, but they're becoming increasingly appealing as monetary policy changes make it easier for these companies to access capital. The Russell 2000 ETF, which tracks small and medium-cap companies, has outperformed the S&P 500 by 9%, indicating significant upside potential in penny stocks.

    BMO analysts note that small-cap stocks have been unfairly punished due to a mismatch between their fundamental value and relative performance. With central bankers cutting rates, it's only a matter of time before these companies' fortunes improve. The influx of investments into small-cap ETFs reflects growing optimism about the sector's potential for growth. According to Dave Nadig, this investment trend is driven by diversification strategies rather than a rotation from winning trades, as investors seek broader exposure heading into year-end.