Stocks Rise Despite Warning Signs of Slowing Growth and Persistent Inflation
• Stocks are advancing despite higher yields and fading rate cut hopes, indicating investors may be too optimistic on growth • Analysts forecast US economic momentum to slow, with GDP growth dropping to 0-1% by mid-year • Inflation concerns may be contributing to the rise in Fed futures prices, not just better growth forecasts • Profit margins, topline growth, and other metrics are softening while valuation metrics look extended • Continued stock and crypto market froth could lead the Fed to keep rates higher for longer to avoid inflating asset prices further