Stovall: "We Will be Rewarded by Holding On" Amid Volatile Markets

Market Overview - The market is experiencing volatility, with a recent rally bringing positive sentiment, particularly for those with retirement accounts [2][16] - The Dow has seen significant movement, with a 1200-point increase and a 4% jump in technology stocks, indicating strong market participation [16] Economic Indicators - Expectations for the upcoming jobs report include the addition of 55,000 new jobs, an increase from the previous period's 50,000 [11] - The unemployment rate is projected to remain at 4%, with wage inflation expected to decrease by 0.1% [12] Federal Reserve Outlook - The Federal Reserve is likely to remain data-dependent, focusing on employment and inflation metrics, with potential rate cuts anticipated later in the year [14][15] - A June rate cut of 25 basis points is considered possible, with further cuts contingent on rising unemployment and decreasing inflation [15] Sector Performance - The technology sector, while previously trading at a 62% premium, has seen its valuation cut to a 27% premium, indicating a correction [9] - Earnings in the tech sector are expected to grow by over 30% in 2026 and another 20% in 2027, suggesting a favorable outlook for investors [10] Year-End Projections - The S&P 500 is projected to end the year with a sub-7% gain, targeting around 7400, consistent with historical performance in midterm election years [18][19] - Defensive sectors such as healthcare and energy are showing signs of improvement and may be good bets for the year [21]