Gap Inc. is a specialty retailer of clothing, accessories and personal care products for adults, teens, and children. The San Francisco-based company has four brands: Gap, Banana Republic, Athleta, and Old Navy. The Gap, Inc. operates approximately 2,500 stores and over 1,000 franchise locations in more than 40 countries. It has about 82,000 full-time employees.

U.S. stocks rallied for a third day on Thursday. The S&P 500 rose 2% and the Nasdaq up 5.4% for the week, led by the Information Technology sector. The Dow rose 1.2%. Oil is at $63 per barrel. Gold is above $3,360 per ounce.

Despite bursts of outperformance, small- and mid-cap stocks (SMID) have underperformed large-caps year to date -- as they have over the past five years. But they may be in a better position to generate market-beating returns going forward. For one thing, SMID companies tend to focus on domestic markets, so their businesses could be less disrupted by the trade and tariff debate, or fallout from unrest in the Middle East, the Russian invasion of Ukraine, issues in China, or other geopolitical developments. As well, the prices of SMID stocks generally are lower than the prices of large-caps. Finally, there are long stretches in the record books when SMID stocks have outperformed large-caps. SMID stocks can be risky, but despite those risks, diversified investors look to have exposure to small- and mid-caps based on the long-term performance record. We estimate that 20% of the U.S. stock market's capitalization is comprised of SMID stocks.

Gap retails apparel, accessories, and personal-care products under the Gap, Old Navy, Banana Republic, and Athleta brands. Old Navy generates more than half of Gap's sales. The firm also operates e-commerce sites, outlet stores, and specialty stores under various Gap names. Gap operates approximately 2,500 stores in North America, Europe, and Asia and franchises about 1,000 more in Asia, Europe, Latin America, and other regions. Gap was founded in 1969 and is based in San Francisco.