Earlier this week, the Exencial investment team held a webinar for clients, summarizing the market conditions to date this year and providing their outlook for the second half of 2024.
Tim Courtney, Chief Investment Officer, began the discussion with his overall market outlook, noting the economy appears to be slowing, with interest rate increases having a decelerating effect. He points out that the money supply, which shrank between 2022 and 2023, has grown in the last 12 months and that year-to-date returns across asset classes have been mostly positive, especially in growth sectors. Finally, Tim explains the concentration he is watching in the large cap space.
Senior Portfolio Manager Jon Burckett-St. Laurent dives into the Magnificent 7 mega cap landscape, noting their incredible gains propelled by the AI theme. Jon also underlines the gap between investor perception of AI versus the technology’s current utility. As such, concentration risk exists in today’s market and the S&P 500 might be more volatile than it appears, he argues.
Next, Randy Farina, Senior Portfolio Manager, discusses where the economy was a year ago compared to today. Shifts are evident in asset prices, Federal Reserve (Fed) policy, global growth and recession risks. Similarly, Randy explores how equity markets have changed over the last 12 months and urges investors to remain disciplined and cautious about overpaying for assets that are disconnected from long-term economic fundamentals.
Lastly, Jeff Hibbeler, Director of Portfolio Management and Senior Portfolio Manager, gives his mid-year outlook on fixed income. He explains that the Fed’s interest rate hiking cycle is likely over given that restrictive policies have been slowly working. The market’s pricing of one or two rate cuts later this year appear more realistic, Jeff remarks.
If you have any questions about current market conditions, please reach out to your Exencial advisor.
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