US and European stock optimism persists despite rate cut doubts

  • Investing.com
US and European stock optimism persists despite rate cut doubts

NEW YORK - As global stocks marked their third consecutive week of gains, Nigel Green, CEO of deVere Group, one of the world's leading independent financial advisory organizations, forecasted that the upward trend in the US and European stock markets is set to continue through the remainder of 2024. This outlook remains firm despite expectations that the US central bank may not lower interest rates until 2025.

Green's prediction follows a period of strong earnings growth, particularly among companies focused on artificial intelligence, and precedes the anticipated US inflation report due Wednesday. The deVere CEO points to sustained economic growth and the potential for interest rate cuts as the two primary narratives bolstering investor confidence.

According to Green, recent global economic forecast upgrades by institutions like the IMF and Bloomberg are fueling optimism. The US economy, with its key indicators such as consumer spending, job creation, and corporate earnings, is seen as a pillar of strength, solidifying investor trust. Additionally, signs of economic recovery in China and a brighter outlook in Europe contribute to a positive global economic sentiment.

On the other hand, the anticipation of interest rate cuts in response to a potential economic slowdown could also support equity markets. Despite hotter-than-expected inflation data, traders are hopeful that the Federal Reserve will not resume rate hikes, as suggested by the upcoming April US Consumer Price Index (CPI) report.

Green advises investors to remain strategic, emphasizing the importance of portfolio diversification, selective stock picking, valuation monitoring, risk management strategies, staying informed, and maintaining a long-term perspective. He notes that while investors will likely seek to benefit from the ongoing rally, they should do so judiciously, often with the guidance of a financial advisor.

The deVere Group, with a network of offices worldwide, serves a client base of over 80,000 and manages $12 billion in assets.

This analysis is based on a press release statement and reflects the views of Nigel Green.

InvestingPro Insights

In line with the optimistic outlook presented by Nigel Green, CEO of deVere Group, the recent performance of the US stock market, as indicated by the S&P 500 index (US500), supports the notion of continued upward momentum. The S&P 500 has experienced a notable 1-week price total return of 0.88%, and the positive trend extends over longer periods, with a 1-month return of 2.01%, a 3-month return of 5.52%, and an impressive 6-month return of 18.47%. Year-to-date, the index has also delivered a strong performance with a 9.57% return.

InvestingPro data further underscores the robust 1-year price total return of 26.73%, which aligns with the sustained economic growth narrative and the potential for a favorable market environment even without immediate interest rate cuts. The previous close price of the index stood at 5222.68 USD, reflecting the market's current valuation.

InvestingPro Tips suggest that amidst this positive backdrop, investors may want to consider opportunities that align with the broader market trend. To enhance their investment decision-making, users can access additional tips on InvestingPro, which currently lists over 7 tips related to market trends, portfolio diversification, and stock valuation. These tips can be especially valuable in a market where strategic positioning is crucial for capitalizing on growth while managing risk.

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