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2Q:24 Capital Markets Outlook: Standing at the Intersection of Hope and Fear
Presented by Rick A. Brink, CFA,, Eric Winograd, Scott DiMaggio, CFA, Walt Czaicki, CFA, Matt Norton
In past CMOs, we’ve called the path toward normalization “on the road to 2025.” With the recent March Federal Open Market Committee meeting behind us, let’s borrow a bit from Chair Jay Powell’s comments to refresh that description: “on the sometimes bumpy road to 2025.”
In the first quarter, markets digested data that painted a mixed picture of earnings growth and suggested stickier inflation. The S&P 500 powered ahead anyway, based on growing indications of a soft landing punctuated by the Fed’s March update. But the rally was largely on the back of valuations and a few high-flying stocks.
Meanwhile, bond yields bounced around as the market adjusted its interest-rate expectations to data releases in real time. After investors began to gravitate toward the Fed’s way of thinking, rates ultimately headed higher.
What We Discussed
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The “Sometimes Bumpy” Road to Normalization: We discussed ongoing issues of growth and inflation, and the current state of “Operation Soft Landing."
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Concentration vs. Broadening Out: Revisited the “magnificent others”, where key factors stand today, and looked for green shoots across the equity spectrum.
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Warning Sign or Improved Entry Point? Discussed opportunities across yield curves and the credit world, and assessed absolute and relative strength across fixed income markets.
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Get Caught Up on Last Quarter’s Outlook
January 9, 2024 / 66 min
Presented by Richard A. Brink, CFA, Eric Winograd; Walt Czaicki, CFA; Scott DiMaggio, CFA, and Daryl Clements
1Q:24 Capital Markets Outlook: Pinpointing a Path Forward
As normalization returns to markets in 2024, we expect inflation to return to the Fed’s target and for economic growth to moderate. Investors can still benefit from capital markets, but brace yourself for a rebalancing of asset prices.