Truist Wealth's Keith Lerner: Market continues to earn 'benefit of the doubt'

Market Overview & Outlook - The market is pricing in an approximately 80% probability of three rate cuts by year-end [2] - S&P, global markets, Eco8 index, and bank index are at all-time highs [3] - Historically, when the Fed cuts rates around new highs, markets have generally moved up in the following 12 months, except during recessions [4] - Over 90% of global markets are in uptrends [17] - The market could experience short-term disappointment due to high expectations surrounding the Fed meeting [10][11] - A pullback is possible, but likely contained within 4-5% [12][13] Earnings & Sector Rotation - Earnings are the primary driver of the market [6] - Money is rotating within the Mag 7 stocks, indicating a healthy market [7] - Technology remains favored due to strong earnings momentum, but small caps are becoming more attractive [8] - Earning strength is broadening to include small caps and midcaps [13][14] International Markets - The firm has incrementally increased exposure to emerging markets and international developed markets like Japan [15] - Gains in international markets are primarily currency-related; forward earning estimates for the MSCI developed markets are negative on a 12-month basis [16] - Japan has broken out to a 40-year high [17]