It’s been a volatile week for stocks, with markets fluctuating as inflation heats up and the outlook for interest rate cuts adjusts. Will McGaugh, investment director at Prime Capital Investment Advisors, and Dan Skubiz, CIO and senior portfolio manager at Ziegler Capital Management, join Market Domination to provide insight into the market as earnings season begins. Discuss prospects.
McGough explains that the market is currently focused on earnings growth rather than multiple expansion. He points out that the valuation multiple is in the low 20% range, and there is limited room for further expansion. McGough stressed that the company “needs to achieve” profit growth this financial year to drive market growth.
Skubiz attributes the market weakness to uncertainty surrounding the Federal Reserve’s monetary policy direction. He observed “trading has been choppy” since the strong CPI result in March, casting further doubt on the prospects for a rate cut, and said the market was “devoid of purpose at the moment”.
Both experts believe there is potential upside for small-cap stocks. Skubiz acknowledges that large-cap stocks are outperforming small-cap stocks, but he still sees “room for small caps.” McGaugh agreed, noting that small-cap stocks “look attractive from a valuation standpoint.”
For more expert insights and the latest market trends, click here to watch the full episode of Market Domination.
This post was written by angel smith
