Strong Economy and Tech Earnings Growth Could Lift Markets to New Highs
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Economic growth and corporate earnings have been strong, providing support for equity markets even without expected Fed rate cuts.
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Markets can reach new highs in the second half of the year due to a shift towards earnings growth, especially in tech sectors like AI.
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Earnings bottomed last year and are poised to inflect higher in the second half as comps get easier, with explosive growth in semiconductors.
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Software earnings surprises may be more muted but growth should improve after companies struggled to maintain high growth numbers.
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Broader earnings growth should happen slowly, with mid-caps and small caps starting to participate alongside mega-cap tech.