Risks to the country's growth story are mounting, says Bartlett's Holly Mazzocca

Economic Outlook - The current economic backdrop is relatively strong, with inflation contained and economic activity on the rise, although there are concerns about how long this will last [2][3] - The geopolitical risk index may have peaked recently, suggesting that the next 12 months could be favorable for stocks historically [3][4] Labor Market Concerns - The labor market has shown significant weakness, raising questions about the sustainability of growth and increasing risks for investors [5][12] - There is a lack of expectation for a meaningful recovery in the labor market, which could affect consumer sentiment and spending [12] Market Reactions - The market had initially priced in expectations for two to three rate cuts, but this has now been largely removed from expectations without major disruption to the S&P 500, which is down approximately 4-5% [6][8] - Despite some challenges such as widening credit spreads and rising inflation expectations, the market does not indicate an end of the economic cycle, suggesting a belief in a return to previous growth trajectories [9][10] Corporate Earnings - Earnings expectations for the remainder of the year have remained stable during the ongoing conflict, supported by productivity gains from AI and opportunities for capital expenditures [11] - Consumer sentiment is a critical factor, as concerns about job stability and spending power could lead to declines in consumer spending [12]