As we reach the halfway point of 2024, a sense of persistence defines the economic
and market landscape. Trends from late 2023 have continued, with surprisingly resilient economic growth mixed with stubborn but decelerating inflation. Equity markets thrived in this better-than-expected environment, having regained all the lost ground from 2022, while the bond market continues to grapple with policy uncertainty and remains largely range-bound. While it’s tempting to forecast a continuation of these trends, our analysis suggests an impending shift. The economy looks poised to cool down in the second half, while volatility is likely to rise off of multi-year lows. Each outcome will have an impact on both policy and markets.

As we wade through multiple market variables, we leverage the expertise of our Strategic & Tactical Asset Allocation Committee (STAAC). Our seasoned team, armed with our proprietary quantitative modeling, meets weekly to analyze and discuss global markets, and is tasked with identifying potential risks and opportunities for our investors.

In this environment, we are suggesting investors prioritize fixed income and remain disciplined with their equity allocations. Simply, we believe the second half of 2024 could lead to a bumpier ride for investors. In our view, steps should be taken to bolster portfolios against a market that may be a bit less friendly in the latter months of the year. By prioritizing income generation and remaining patient and disciplined with equities, we are confident investors can successfully navigate around a potential turning point for markets later this year.

LPL Research’s 2024 Midyear Outlook: Still Waiting For The Turn, offers fresh insights into the economic and market landscape, along with their potential impact on investment portfolios.