James Demmert, chief investment officer at Main Street Research, told Fortune via email that recent jobs numbers showed the economy is “vibrant.”
And if Thursday’s consumer price index report shows inflation is fading, that will confirm substantial rate cuts are coming to help lift corporate profits, he said. Demmert expects the S&P 500 to surge more than 7% to 6,150 by year-end.
“Our message to investors is that we are in the early stages of a business cycle and bull market with the benefits of the AI tailwinds which [may] result in above-average equity returns going forward,” he said.
Demmert also noted, like Shalett, that investors may still be pricing in too many rate cuts moving forward, but he argued that any mismatch in expectations that causes stocks to fall in the near term should be used as a buying opportunity.
The CIO warned that there are risks that could derail stocks’ bull run, from harsh AI regulation to geopolitical issues, but he believes investors shouldn’t give up on this market. “We think it's of utmost importance for investors to embrace this new bull market,” he argued.
Read the full article here.
This article also appeared on Yahoo Finance.
Disclosures: Main Street Research LLC (“MSR”) is an SEC registered investment adviser; however, this does not imply any level of skill or training, and no inference of such should be made. The opinions expressed herein are as of the date of publication and are provided for informational purposes only. Content will not be updated after publication and should not be considered current after the publication date. We provide historical content for transparency purposes only. All opinions are subject to change without notice and, due to changes in the market or economic conditions, may not necessarily come to pass. Mention of a security should not be considered a recommendation or solicitation to purchase or sell the security, and any securities mentioned may be held by MSR for client portfolios. The information posted represents an opinion as of the date published and should not be considered an investment recommendation. MSR does not become a fiduciary to any reader or other person or entity by the person’s use of or access to the material. The reader assumes the responsibility of evaluating the merits and risks associated with the use of any information or other content and for any decisions based on such content. Investment disclosure —neither the information nor any opinion expressed herein constitutes a solicitation by main street of the purchase or sale of any securities or other financial instruments nor a recommendation to hold, sell, buy, or own a particular security or sector in your portfolio and do not represent all securities purchased, sold or recommended for client accounts. The listener should not assume that an investment in these securities has been or will be profitable. Individual recommendations are tailored to individual portfolios. Main street client portfolios are managed separately and vary in regard to risk and return dependent upon individual client circumstances. A full list of all securities in the MSR client portfolio is available upon request.
