Softness in employment will get Fed to lower rates, says Piper Sandler's Michael Kantrowitz

Market Trend & Dollar Impact - A weaker dollar generally supports stocks, benefiting companies with overseas sales [2][3] - Approximately 40% of S&P 500 sales are outside the US, making a weaker dollar a positive factor [3] - Multinational corporations may find a cushion in overseas earnings due to the weaker dollar, especially if domestic conditions are uncertain [4] Economic Outlook & Valuation - The US economy experienced an average growth of 1% in the first half of the year [6] - Market valuations are considered expensive by traditional metrics, but low oil prices and interest rates support high valuations [7][8] - Key risks to watch include spikes in interest rates, oil prices, and unemployment, as these could negatively impact valuations [9] Employment & Monetary Policy - The employment backdrop has been softening for over a year, indicating a bifurcated economy with some companies needing to conduct layoffs [11] - A glacial slowdown in employment is anticipated to lead to rate cuts [12] - The current economic situation is not expected to result in a recession similar to 2007 [12]