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

Economic Outlook - The LPL Research team anticipates a significant market turn in 2024, influenced by shifts in inflation, interest rates, and recession risk, but this turn has yet to materialize as of midyear 2024 [1][3] - The U.S. economy has shown unexpected resilience, continuing to grow despite high inflation and late-cycle pressures, although a potential slowdown is indicated with consumer spending expected to decelerate and labor market conditions softening by year-end [2][14] Investment Landscape - Fixed income is highlighted as an attractive asset class due to Treasury yields being at their highest levels in decades, with a focus on income generation as the Federal Reserve is expected to cut rates by the end of the year [14] - The stock market has experienced strong gains in the first half of the year, driven by expectations of looser Fed policy and robust corporate earnings growth, but elevated valuations and potential volatility, particularly with the upcoming U.S. presidential election, suggest a more cautious investment approach [14] Market Volatility and Global Considerations - The upcoming U.S. presidential election is expected to increase market volatility, a common trend in election years, but broader economic forces and corporate health will remain key market drivers [14] - Geopolitical tensions and trade policies, especially between the U.S. and China, continue to impact global market dynamics and investment strategies [14]