As the first quarter earnings season draws to a close, Innovator Capital Management Head of Research & Investment Strategy Tim Urbanowicz, joins Market Domination to discuss the ongoing earnings season and the market outlook.
Urbanowicz highlights that the first quarter saw "very strong margin growth" across various sectors, with technology and communication services leading the way. He explains that high inflation often contributes to margin growth, which was the case during this earnings season. However, he acknowledges that if the "inflation narrative [were] to get under control," it could have a negative impact on margins moving forward.
On the topic of artificial intelligence, Urbanowicz firmly believes that "this is not a trend that you want to fight." With companies actively seeking to build and integrate AI infrastructure, he emphasizes the technology’s "critical" importance for boosting productivity.
When asked about potential rate cuts and how investors should position themselves in a "higher-for-longer" interest rate environment, Urbanowicz suggests, "You have to find ways to decouple risk management needs from the reliance on interest rates coming down."
"Our base case view is you’re going to see a world where economic growth remains firm and inflation remains firm," Urbanowicz says.
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