As stocks rise and we enter the second half of the year, investors want to know what the market outlook is for the remainder of 2024. Brian Bendig, Chief Investment Officer at MJP Wealth Advisors, joins Market Domination Overtime to discuss what’s to come.
Looking back on the first half of the year, Bendig said, “The Magnificent Five and some of the Magnificent Seven continued to lead and dominate the charts.” He noted that nine of the S&P 500 (^GSPC) sectors lagged behind the technology sector. But Bendig expects this could change as the market moves into the second half of the year and earnings season broadens to include a broader range of companies. He adds that “continued confidence in slowing inflation” could help “the market catch up.”
Regarding the election’s impact on markets, Bendig told Yahoo Finance: “I’m looking at things from the perspective of putting the election first, because as we all know, it’s very hard to put politics against you.”
For more expert insights and the latest market trends, click here to watch this entire episode of Market Domination Overtime.
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Video Transcript
We have officially entered the second half of the year and the market has started off with a gradual upturn.
Joining us now is Brian Vig, chief investment officer at JP Wealth Advisors, the top performer on the day on the NASDAQ.
Nice to meet you.
So, this year has started off really well.
Brian.
It sounds like what you’re trying to say is listen, stay positive, better times are coming.
Well, Josh, I think that’s our policy right now for the entire remainder of the year, and this is based on the fact that we expect revenue to continue to grow sequentially.
But you know, in the first half of this year, the five stocks from last year, the seven stocks, continue to lead the way, and especially if you look at the declines over the last three months, nine of the 11 sectors in the S&P 500 have lagged behind our friends in the technology and communication services sectors, with most of those sectors either flat or negative, with only slight positives overall, creating a huge disparity in returns.
But I think that could change, because I think there’s an opportunity for a little bit of catch-up in the market as earnings grow outside of mega-cap tech and as interest rate cuts start to look more and more likely after September and confidence in slowing inflation starts to grow.
So my question for you is, does today’s move hint at the fact that some of that is at risk, given that what the market seemed to be pricing in today was a President Trump inauguration?
The risks involved are around spending, tax cuts and how that ultimately affects inflation.
And then, of course, the bottom line is, what does that mean for the Federal Reserve?
Are you confident that this deinflationary trend will continue, or how much of a risk is there at this point?
J That’s a great question.
Well, I think the bond market has been telling us in the last few days that there’s been an increased likelihood, or almost sudden, reaction to Trump returning to the White House, and the bond market has seen interest rates rise due to concerns based on fiscal policy, which will drive inflation and drive the economy forward.
Well, but I look at things from an electoral perspective first, because, you know, it’s really hard to handicap politics.
If we analyze it in detail, we find that the consumer part is actually driving inflation and maintaining its sticky side.
Well, with the consumer slowdown, slowing spending, well, we’ll hear some shock numbers tomorrow, we’ve seen a decline in job openings, a decline in the sharp rise in wage inflation, and rising home prices.
yes.
But because of supply and demand, some places are freezing things up a bit because interest rates are still high.
As actual market data is reflected in the government’s inflation figures, some of that data is expected to change.
So we remain confident that inflation will come down and interest rates will come down later this year.
The Fed has signaled it wants to lower interest rates, but no one really knows, so it’s taking a wait-and-see approach.
But at the end of the day, we see inflation easing up in the system and we expect earnings to improve, so we think our outlook is positive going into the second half of the year.
