DIA - I'll Stick With Large-Cap U.S. Stocks In The Months Ahead

2024-05-09 16:54:16 ET

Summary

• Continued gains in large-cap US stocks are likely due to steady benchmark rates, rising earnings estimates, and a relative advantage over bonds.
• While stocks are not cheap, the current valuation may not be as bad as it seems if earnings continue to rise.
• The inflationary environment and a healthy global economy are bullish indicators for large-cap US stocks, which derive profits from both domestic and overseas markets.

Main Thesis / Background

The purpose of this article is to discuss the broader equity market and why I see multiple reasons for continued gains in large-cap US stocks especially. This may seem counter-intuitive given the run this sector has been on, but we have seen an uptick in volatility and a pullback from the highs. This certainly is making some investors cautious, but a holistic view suggests that more gains are likely the base case....

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