US equities (^GSPC, ^DJI, ^IXIC) closed higher on Wednesday, with several mega-cap stocks regaining much of what they lost in the recent sell-off. Can the markets continue to climb back to their all-time highs or will the Federal Reserve throw a monkey wrench into gains?
State Street Global Advisors global chief investment officer Lori Heinel joins Market Domination Overtime to give insight into the current market movements and what investors can expect moving forward.
The US Labor Department revealed that, for the 12 months through March 2024, 818,000 fewer jobs were created than expected. Heinel argues the data “underscores the Fed’s need to act,” saying she expects a 25 basis point cut in September.
In terms of how the Fed will continue to operate after September: “They have to remain data dependent. That’s been the way that this Fed has operated under the Powell administration really since the inception. So for them to abandon that would create other challenges for market participants.”
Heindel advises clients: “We still are a little overweight on equities because we do think that there’s a bit more room to run here, but we think that we’re going to see more breadth in the market. And we did see earnings come in, away from the Mag Seven, being positive for the first time in many, many quarters. So that was a constructive sign. If the Fed does take this measured movement toward reducing rates, we think that the soft landing scenario is intact. And that gives us more confidence.”
For more expert insight and the latest market action, click here to watch this full episode of Market Domination Overtime.
This post was written by Nicholas Jacobino