BWVTF - Taking Stock: Q3 2024 Equity Market Outlook
2024-06-28 10:30:00 ET
Summary
- U.S. stocks held onto gains in the second quarter, even as concerns over stubborn inflation, strong economic data and reduced expectations for Fed rate cuts sprinkled cold water on the Q1 hot streak.
- Macro factors still hold sway over daily moves at the broad index level, but we see company earnings growth as the catalyst for increased stock-level dispersion.
- Avoiding underperformers can be as important as choosing outperformers in this pursuit of benchmark-beating returns. What are we avoiding today?
By Tony DeSpirito
Key takeaways
Macro worries meet AI wonderwall. Stocks have managed to climb a wall of macro worries, thanks to largely solid earnings that we believe can expand beyond AI beneficiaries and continue to support prices. As Q3 begins, we look for:
- Greater dispersion as earnings growth broadens
- Alpha capacity in stocks chosen ? and avoided
- Fresh reason for an active bent in U.S. large caps