A senior portfolio manager for U.S. equities at Morgan Stanley Investment Management was interviewed by Dow Jones.
On the Federal Open Market Committee (FOMC), expects only slow rate cuts this year, to be “patient”.
- economy appears strong
- the Fed has “time to be patient and make sure the true secular trend in inflation is lower”
- “inflation is running at a substantially lower rate” than the Fed Funds rate
- messaging from the Fed that cuts need to come sooner would make him a little nervous because it could mean the economy may be slowing faster than he expected
On the outlook for US equities in 2024:
- expects it will be more challenging for U.S. stocks to keep rising in 2024 after the S&P 500’s jump in 2023
- but “the market will be higher this year because I think earnings will come through.”
- expecting to see a broadening out of gains across shares, more companies participating in the stock market’s rise.
- “I am of the camp that the economy will remain strong,”
- “I don’t hear signs of slowdown.”
- stock market may be more volatile than last year
- “having some powder dry for an opportunity to step in” and buying during a pullback may be “the right thing to do.”