CA - ClearBridge Q2 2024 Commentary

2024-07-08 12:00:00 ET

Summary

• ClearBridge is a leading global asset manager committed to active management. Research-based stock selection guides our investment approach, with our strategies reflecting the highest-conviction ideas of our portfolio managers.
• While recent datapoints suggest U.S. economic growth is slowing, a longer-term perspective supports a different conclusion: the economy is healthy and normalizing from a period of elevated post-COVID growth.
• The ClearBridge Recession Risk Dashboard improved to an overall green signal this month with three underlying indicator improvements, supporting our view of continued economic normalization.
• Despite equity market valuations appearing lofty, an additional perspective shows that a handful of the largest benchmark constituents are distorting valuations. The typical stock trades at a much more reasonable multiple that is less than half a turn (0.5x) above the long-term average.

By Jeffrey Schulze, CFA

The Long View: It's All About Perspective

Slowdown or Normalization?

Perspective is defined as "the subjective evaluation of relative significance; a point of view." Perspective matters in all facets of daily life, and events both major (parenthood) and minor (a traffic jam) can change how a person sees the world. This is particularly true when analyzing economic and financial market data, with some of the best ideas emerging when analysts step back to re-evaluate and consider alternative perspectives. At present, an array of datapoints suggests the U.S. economy is slowing down. However, zooming out and adopting a longer-term perspective leads to a different conclusion: the economy remains healthy and is instead normalizing from a period of elevated growth following the recovery from the COVID-19 pandemic....

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