Major indexes (^DJI, ^IXIC, ^GSPC) opened in the green on Monday ahead of the highly anticipated Jackson Hole meeting, where Federal Reserve Chair Jerome Powell is expected to discuss interest rates. Matt Stucky, Northwestern Mutual Wealth Management chief portfolio manager of equities joins Morning Brief to share his insights on the market outlook.
Stucky emphasized that a critical factor for the next phase of the market is determining whether the Federal Reserve will transition from being a headwind to asset prices to potentially easing rates gradually. He pointed to the Conference Board’s Leading Economic Index, which is currently experiencing "the fourth deepest drawdown," indicating ongoing deterioration in the economy.
"I don’t think the Fed wants to repeat the mistake they made in the fourth quarter of 2023. And the mistake they made was signaling aggressive path for rate cuts in 2024, and here we are in the month of August and we haven’t had a single cut yet," Stucky explains. He notes that while the Fed’s commentary has influenced business and market decisions, those signals have not materialized into actual rate cuts.
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