💥Strong economic growth and rate cuts create a favorable environment for risk assets.
📈The second half of the year is expected to be particularly strong.
💡Small caps can join the rally and outperform in a strong growth environment.
💰Dependence on rate cuts for pockets of the market, such as small caps and cyclicals.
🤝Positive perspective on both small caps and large caps in a strong growth environment.
What fuels the rally in the second half?
—Strong economic growth, expectation of a slowdown but no recession in sight, and rate cuts.
How aligned are we on the Fed?
—Market uncertainty about the number of rate cuts, but as long as there is strong growth, it remains positive.
Why are small caps expected to perform well?
—In a strong growth environment with rate cuts, small caps are showing attractive valuations and can outperform.
Should investors move cash out of money market funds?
—Not all cash will flow into risk assets, but investors should start considering reallocating into fixed income and equities.
What is the position on equities and fixed income?
—Overweight in equities and fixed income, and underweight in cash.
00:02Last week's record highs to start the shortened trading week.
00:15Expect more volatility in the coming months but a renewed rally in the second half.
00:31Continued economic expansion with a slowdown in growth but no indicator of recession.
00:41Rate cuts in a strong growth environment create a favorable risk asset environment.
01:02Uncertainty in the market about the number of rate cuts by the Fed.
