LPL Research Releases 2024 Midyear Outlook: Still Waiting for the Turn

By: LPL Financial Holdings, Inc. via GlobeNewswire

July 09, 2024 at 09:00 AM EDT

SAN DIEGO, July 09, 2024 (GLOBE NEWSWIRE) -- LPL Financial LLC today released its 2024 Midyear Outlook, “Still Waiting for the Turn.” Expanding on LPL Research’s 2024 Outlook, “A Turning Point,” this midyear update offers fresh insights into the economic and market landscape, along with the potential impact for investment portfolios.

At the end of 2023, the LPL Research team posited that in 2024, the markets would make a definitive turn to a more recognizable place, marked by meaningful shifts in inflation, interest rates and recession risk. At midyear, LPL professionals are still waiting for that turn.

“Economic growth has continued to surprise to the upside,” said Jeffrey Roach, PhD, Chief Economist at LPL Financial. “The U.S. economy has continued to exhibit remarkable resilience, growing beyond expectations despite facing high inflation and other late-cycle pressures,” he added. However, the Outlook indicates a potential slowdown, with consumer spending expected to decelerate and labor market conditions expected to soften by the end of the year.

Key Highlights from the 2024 Midyear Economic Outlook:

Anticipated Economic Shifts: While the economy remains robust and resilient, recent data suggests a forthcoming slowdown. The strong consumer spending we’ve seen is expected to decelerate, particularly on big-ticket items, and the labor market may soften, with the unemployment rate projected to rise in the latter half of the year.
U.S. Presidential Election: As the closely contested rematch between Biden and Trump approaches, market volatility is expected to rise, a common trend in election years. Despite the political landscape’s influence and expected volatility, broader economic forces and corporate health remain key drivers of the market and economy. Regardless of what happens in November, investors should keep a long-term perspective.
Global Market Considerations: The Outlook addresses the implications of geopolitical tensions and trade policies, particularly between the U.S. and China, which continue to influence global market dynamics and investment strategies.
Investment Landscape: The report highlights several key areas for investors to consider:
- Fixed Income: With Treasury yields near their highest levels in decades, fixed income has become an attractive asset class. Investors are advised to focus on income generation over price appreciation, especially as the Federal Reserve is expected to cut rates by the end of the year.
- Equities: The stock market has enjoyed strong gains in the first half of the year, driven by anticipation of looser Fed policy and robust corporate earnings growth. However, elevated valuations and potential volatility, especially with the upcoming U.S. presidential election, suggest a more cautious approach moving forward.

“As we navigate a complex and shifting economic landscape, our Midyear Outlook serves as a crucial barometer for advisors, institutions and their clients,” says Marc Zabicki, Chief Investment Officer for LPL Financial. “Understanding the underlying factors driving market moves helps us to better prepare and adapt investment strategies to meet future challenges and opportunities.”

Important Disclosures

Please see the LPL Financial Research 2024 Midyear Outlook for additional description and disclosure.

The opinions, statements and forecasts presented herein are general information only and are not intended to provide specific investment advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, please consult your financial professional prior to investing.

Any forward-looking statements, including the economic forecasts, may not develop as predicted and are subject to change based on future market and other conditions.

Investing involves risk including the loss of principal.

The Standard & Poor’s (S&P) 500 Index tracks the performance of 500 widely held, large-capitalization U.S. stocks. All indexes are unmanaged and cannot be invested into directly.

About LPL Financial

LPL Financial Holdings Inc. (Nasdaq: LPLA) was founded on the principle that the firm should work for advisors and institutions, and not the other way around. Today, LPL is a leader in the markets we serve, serving nearly 23,000 financial advisors, including advisors at approximately 1,100 institutions and at approximately 570 registered investment advisor firms nationwide. We are steadfast in our commitment to the advisor-mediated model and the belief that Americans deserve access to personalized guidance from a financial professional.

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