The Fed may have new stimulus in the second quarter to cut interest rates deeper this year.
Tony Dwyer of Canaccord Genuity believes that a deteriorating jobs market and easing inflation will eventually prompt the Fed to act.
“I'm not saying they have to go back to zero, but they have to be more aggressive,” the company's chief market strategist told CNBC's Fast Money on Thursday. “One of the most aggressive topics I talk about with clients is how bad the incoming data is.”
Dwyer contends that low employment survey participation rates skew the data in the Bureau of Labor Statistics' jobs report. The next monthly jobs reading is due on Friday.
“It doesn't mean they're manipulating the data,” he said. “Conspiracy theories go overboard with these things. The truth is they don't have a good collection mechanism. So, the reviews are important and most of them are negative now.” Dwyer. “Our focus now is that interest rate cuts are what you need.”
At the Federal Reserve's interest rate policy meeting in March, officials initially planned to cut interest rates three times this year. These cuts will be the first since March 2020.
Dwyer expects that the interest rate reduction will give Finance, Consumer Dictionary, Industries And health care Batch stock. Collections are positive this year.
“Our call is to buy into the expanding theme of weakness rather than simply adding to large cap-weighted indices. The top 10 stocks still represent 33.7% of the total SPX (S&P 500) market capitalization,” he wrote in a recent note. For customers. “History shows that this is historically high and does not last forever.”
According to Dwyer, the market's performance will become more balanced by the end of this year until 2025.
“It's not just a mag 7.”
“It comes from expanding participation in earnings growth. It's not just a Mag 7,” he told Fast Money.
“The Magnificent Seven” which consists of the alphabet, Amazon, apple, Meta platforms, Microsoft, Nvidia And Teslaoutperforming the broader market this year – up 17% instead Standard & Poor's 500 10% higher.
The S&P 500 closed at a record high on Thursday and just posted its strongest first-quarter gain in five years.
“When you're overbought and that's the limit to the upside, you just want to wait for a better opportunity,” Dwyer said. “From our perspective, it comes with deteriorating employment data leading to lower interest rates. You have to worry about the economy. That's when I want to get in.”
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