Stock market rotation has legs to it, strategist says

GDP figures released Thursday show the US economy grew at a rate of 3% in the second quarter. Verdence Capital Advisors CIO Megan Horneman joins Morning Brief to discuss the implications of this print for future market (^DJI, ^IXIC, ^GSPC) performance.
Horneman notes that while many market gains have been attributed to the AI trade, this trend is “just not sustainable.” She observes that markets are starting to broaden out, a trend she expects to continue until “we get some evidence that the economy is slowing, and that’s our concern.”
She characterizes today’s GDP figures as “backward-looking,” expressing surprise at consumer spending driving growth given high interest and debt levels. Horneman suggests that consumer-driven growth “is not very sustainable either,” forecasting a slower economy towards the end of the year.
Regarding investment strategies in this uncertain environment, Horneman advises investors to “rebalance your portfolios, make sure you’re back in line where that allocation should be,” cautioning against being overweight in names known to drive markets.
“You can’t have a slowing economy, a Fed that’s cutting rates because we have a slowing economy, but yet have double-digit earnings growth for next year,” she states.

About Yahoo Finance:

Yahoo Finance provides free stock ticker data, up-to-date news, portfolio management resources, comprehensive market data, advanced tools, and more information to help you manage your financial life.

– Get the latest news and data at finance.yahoo.com

– Download the Yahoo Finance app on Apple (https://apple.co/3Rten0R) or Android (https://bit.ly/3t8UnXO)

– Follow Yahoo Finance on social:

X: http://twitter.com/YahooFinance
Instagram: https://www.instagram.com/yahoofinance/?hl=en
TikTok: https://www.tiktok.com/@yahoofinance?lang=en
Facebook: https://www.facebook.com/yahoofinance/
LinkedIn: https://www.linkedin.com/company/yahoo-finance

source