As we navigate the remaining of 2024, Tiempo Capital’s mid-year financial report provides you with essential insights into the surging equity market and the underlying risks amidst high valuations and economic uncertainties. We highlight strategic shifts to Investment Grade Fixed Income investments and examine the sustainability of consumer spending. Learn how to position your portfolio to optimize returns and manage risks in these dynamic times.

Executive Summary

The current mid-year market outlook is marked by high hopes tempered with significant risks. Over the past year, the S&P 500 has surged higher, driven largely by the stellar performance of a select few stocks. The market holds great expectations: for continued growth in corporate earnings, for the Federal Reserve to cut rates and further loosen financial conditions, for Artificial Intelligence to herald a new technological era, and for inflation to continue its downward trend while maintaining full employment. Indeed, these are Great Expectations, but they come with significant risks.

As we navigate through the remainder of 2024, it is crucial to recognize that these great expectations are accompanied by potential perils. Market volatility, geopolitical uncertainties, and the evolving impact of technological advancements pose significant challenges. Inflation, although moderating, remains a concern, and the trajectory of interest rates will continue to influence market dynamics.

Having reviewed numerous mid-year outlooks from leading financial institutions in our Global Economic Forecasts report we find that their extensive analyses often boil down to three core themes: (1) a strong economy, (2) a recommendation to buy risk assets (equities), and (3) the transformative potential of Artificial Intelligence. These themes have undeniably dominated the market narrative in recent months.

In our mid-year outlook, we aim to delve deeper into these prevailing trends, drawing comparisons to similar historical periods and projecting potential future developments. Our analysis will provide a balanced perspective, highlighting both the opportunities and the risks that lie ahead. As asset managers, our focus must remain on anticipating where the market is heading, rather than dwelling on past performance. Download our complete mid-year financial outlook:

Great Expectations and Impending Perils- 2024 Mid-Year Financial Outlook
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This material is for informational purposes only and does not constitute financial, legal, tax, or investment advice. All opinions, analyses, or strategies discussed are general in nature and may not be appropriate for all individuals or situations. Readers are encouraged to consult their own advisors regarding their specific circumstances. Investments involve risk, including the potential loss of principal, and past performance is not indicative of future results.