The Federal Reserve may adopt new incentives in the second quarter and further cut interest rates this year.
Tony Dwyer of Canaccord Genuity believes that the deteriorating job market and slowing inflation will eventually prompt the Fed to take action.
“I’m not saying they have to go back to zero, but I’m saying they have to be more aggressive,” the firm’s chief market strategist told CNBC’s “Fast Money” on Thursday. “One of the most aggressive topics I talk to clients about is It’s how bad the incoming data is.”
Dwyer believes declining participation in employment surveys is distorting the Bureau of Labor Statistics’ jobs report data. Next monthly employment data will be released on Friday.
“It’s not that they’re manipulating the data. Conspiracy theories are crazy about this stuff. In fact, they don’t have a good collection mechanism. So, the modifications are significant, and most of them are negative now,” he said explain. Dwyer. “Our focus now is that a rate cut is exactly what you need.”
At the Federal Reserve’s interest rate policy meeting in March, officials tentatively planned to cut interest rates three times this year. This will be the first reduction since March 2020.
Dwyer expects rate cuts to help finance, consumer discretionary, Industrial products and health care Stocks boosted. These groups have been positive this year.
“Our recommendation is to buy weak expansion themes rather than simply add to the large-cap weighted index,” he wrote in a recent note. “The top 10 stocks still account for 33.7% of the total SPX (S&P 500) market capitalization.” “To customers. “History shows this is at an all-time high and won’t last forever.”
Market performance will become more even by the end of this year and into 2025, Dwyer said.
“It’s not just Mag 7”
“This comes from expanded participation in profitable growth. It’s not just Mag 7,” he toldMoney comes quickly. “
“Seven Heroes” is composed of letter, Amazon, apple, meta platform, Microsoft, Nvidia and Teslaoutperformed this year — up 17%, while S&P 500 Index 10% higher.
The S&P 500 closed at a record high on Thursday and just posted its strongest first-quarter gain in five years.
“When you’re overbought and the rally goes to such extreme levels, you just want to wait for better opportunities,” Dwyer said. “We think a worsening of the jobs data will lead to lower interest rates. You have to worry about the economy. That’s When I want to step in.”
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