Several money-managers interviewed by Barron’s like the setup, seeing more gains in the equity market, along with some individual stocks and sectors that could outperform.
“It’s the whole ‘don’t fight the Fed mantra. It’s as simple as that,” said Andrew Krei, co-chief investment officer of Crescent Grove Advisors. “The Fed seems biased toward wanting to cut.”
The S&P 500 is up about 11% this year, hovering near 5,300. Big tech has played a role, but the rally has expanded well beyond the Magnificent Seven to other sectors and stocks, a trend Krei thinks will continue. He favors financials, industrials and utilities—a mix of cyclical and defensive sectors that should benefit if the economy cools, but not too much.
“Earnings are strong. The consumer still looks pretty healthy and while inflation isn’t slowing as much as the Fed would like, it’s still the correct trajectory,” he said.
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