The tech-heavy Nasdaq Composite (^IXIC) recorded its worst day this week since 2022 as investors began abandoning Big Tech stocks. Increased political uncertainty surrounding the upcoming election has many on Wall Street believing that a rate cut by the Federal Reserve is likely in September, paving the way for a market shift.
Annex Wealth Management Chief Economist and Strategist Brian Jacobsen joins Morning Brief to provide insight into market movements in large-cap (^DJI, ^IXIC, ^GSPC) and small-cap (^RUT) stocks )
Jacobsen begins by expressing his short-term view for the market and this earnings season: “We think that actually in the short term here, it’s mostly fundamentals that matter. But then as we get into, say, in 2025, it’s probably going to be a little bit more about politics. So it’s going to be almost punctuated by political volatility. But keep in mind it’s a question of how much you pay for those fundamentals.
Jacobsen predicts that market drivers will be “split into two different parts” by the end of 2024: the Fed and the election.
“Between now and September, it’s probably going to be more focused on the Fed. We’re going to be distracted by politics, but really, until we get closer to, say, late September, early October, when the polls get a little more accurate, we think which will just be pockets of volatility”, explains Jacobsen. “The ‘Trump business’ has come back into vogue with a vengeance in the last week. But that may slow down a bit.”
For more expert insights and the latest market action, click here to watch this full episode of Morning Brief.
This post was written by Nicolau Jacobino
