RBC Capital Market's Lori Calvasina: Markets are still focused on Fed cuts right now

Market Trends & Inflation - The market is currently focused on anticipated Fed rate cuts, a sentiment prevalent for the past five to six months [3] - Inflation pressures are building but not yet out of control, aligning with economists' expectations [2] - Inflation tends to exert downward pressure on PE multiples, which aligns with the slowing gains observed in the S&P [4][5] - Historically, rising inflation has correlated with increased equity allocations in household portfolios [5] Labor Market & Economic Uncertainty - Increased uncertainty surrounds the labor market, evidenced by revisions since the latest NFP report [2] - The market may be approaching a point where Fed rate cuts are deemed necessary [7] - Investors previously factored in rate cuts for late 2025 and 2026, but the timing of these cuts is now a focal point [10] Investment Strategy & Seasonality - Negative seasonality in September and October remains a concern [6] - The market's peak valuation levels necessitate careful consideration, especially given the potential need for rate cuts [8] - A significant portion of expected developments may already be priced into current stock valuations [10]