Stocks Pull Back After Strong Start to 2024, More Room to Fall Before Recovery

• After two losing weeks for US stocks, was a pullback inevitable given strong Q1 start in 2024? Strategist says yes due to extended period of high sentiment and need for negative catalyst.

• About half the S&P 500 still trading below January 2022 levels; cyclicals like energy, financials have catching up to do if economic recovery continues.

• Banks kicking off earnings season; idiosyncratic pressures but also benefits seen in reports so far.

• Pay attention to overall consumer health and demand, which has been resilient even as Fed hiked rates.

• Labor market remained strong last couple years so spending can stay solid even for lower income groups that rely on monthly income over wealth.