The chief economist at Apollo Global Management, Torsten Slok, predicts higher inflation in the coming quarters, signaling a potential market slowdown. Recent data showing a recovery in manufacturing activity and signs of life in inflation are contributing factors to this forecast. Slok emphasized the importance of the repricing of rates, indicating an impending slowdown that has been anticipated for some time.
Slok highlighted the dramatic tailwind to consumption and capex, driven by the stock market’s significant gains since the November FOMC meeting. He advised investors to focus on winners and losers from a bottom-up perspective rather than relying solely on past high-performing stocks.
In a separate report, LPL Financial’s chief equity strategist, Jeffrey Buchbinder, stated that the upcoming earnings season is expected to be similar to the previous quarter, with mega-cap technology companies leading the way. Buchbinder forecasts nearly 40% year-over-year earnings growth for the “Magnificent Seven” companies.
Meanwhile, Wells Fargo raised its 2024 S&P 500 target to 5,535, citing potential upside in equities despite expected volatility in the first half of the year. RBC Capital Markets recommended sticking with energy stocks, noting geopolitical risks and a strong economy as positive factors for the sector.
In other news, U.S. crude oil futures fell after Israel reduced its troop presence in Gaza, and a New York Federal Reserve survey showed steady inflation expectations among consumers. Fundstrat’s Tom Lee expects a stock market rally post-March CPI report, while UBS remains optimistic about AI-driven tech stocks.
Overall, the market outlook remains mixed, with various factors influencing investor sentiment and market performance in the near term. Stay tuned for more updates on the evolving economic landscape.
