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Riding The Momentum - Looking Beyond The Tech Giants

Home Market Outlook Today's Market Riding The Momentum - Looking Beyond The Tech Giants. BlackRock Systematic's Systematic Equity Outlook explores macro and micro risks. The persistence of persistent market themes like AI has contributed to high equity index concentration and strong performance of the momentum factor. Inflation and rising geopolitical risks dominate the equity market narrative.

U.S. GDP Report Shows Stagflation Is Tightening Its Grip

U.S. GDP Report Shows Stagflation Is Tightening Its Grip. The soft landing narrative is dead as GDP growth falls below expectations and inflation rises. Traders are removing rate cuts from the outlook, leading to higher nominal Treasury rates and a stronger dollar. Rising rates and tightening financial conditions pose a significant risk to the equity market.

Economic Growth, Labor Productivity And Investment

Labor productivity-output per hour worked-drives long-run economic growth. Bill Conerly says the U.S. Can't expect the economy to grow by working longer hours. He says productivity growth has slowed since the Great Recession. Conerley says businesses need to focus on improving productivity to boost growth.

Trials And Tribulations

Bank of America projects that the United States will have a debt of $34 trillion by year-end. Mark Grant says the U.S. Spent $429 billion on interest payments alone in the last year. America sold $22 trillion in debt last year while the Fed raised interest rates to combat inflation. He says the Fed needs to consider the collateral damage to our economy.

U.S. Q1 2024 GDP Growth Looks Set For Slowdown In Thursday's Release

US economy appears on track to post softer growth in the first-quarter GDP report scheduled for release on Thursday. The key debate is whether the economy will stabilize at a softer pace of growth vs. Decelerate further in the months ahead. A critical factor supporting the upbeat economic view: consumer spending is still solid.

Climbing Limo GDP Forecast For Q1 2024

On Thursday, the Bureau of Economic Analysis will publish its first estimate of the United States' Gross Domestic Product during the first quarter of 2024. It's a good opportunity to check in with how 2024-Q1's GDP tracks with what a momentum-based forecasting method projected it would be for this quarter. The Atlanta Fed's GDPNow forecast for 2024- Q1 could be the first in which actual GDP exceeds the momentum forecast.

The Next Fed Meeting And The Potential Impact On 2024 Equity Returns

Federal Reserve's upcoming FOMC meeting will have a significant impact on the equity market and stock prices. I don't expect an interest rate cut at the meeting and see a possibility for higher 10-year rates in the next 1-2 years. I see a gloomy return profile for the S&P 500 index in 2024.

SPY: The Setup Looks Extremely Bearish

SPY has been on a strong run recently, but the outlook is very bearish right now. The S&P 500 is overvalued based on several valuation models. A weakening macroeconomic outlook also poses a severe headwind for SPY. SPY is facing a challenging economic environment and outlook.