Valuation could be issue if earnings don't live up to H2 hype

after last week's whirlwind of consecutive highs from the S&P 500 and Nasdaq Composite. Evercore ISI and Goldman Sachs strategists have bothMiller Tabak Managing Director and Chief Market Strategist Matt Maley sits down with the Morning Brief team to talk about the market rally, where investors should be looking, and the outlook on the Federal Reserve's late-2024 interest rate cuts.

Well, you know, you never like to see a narrow rally having said that uh you know, this time last year, we had a very similar narrow rally and yet it kept going for another month and a half and it really didn't see a pullback until we got to August.Um But, you know, it, it, one of the things that does tell us is that, you know, investors aren't all that confident about anything outside of the A I uh phenomenon.

I mean, NVIDIA, uh it is not an expensive stock if you look at it on a, on a long term basis, but you getting 5% in, in cash right now, which is outperforming, as I mentioned, I mean, you know, the S and P equal weight, uh index of Russell 2000 is down on the year.So why not have, if you're going to be overweight in those, those and those big caps that are doing so well and are, uh, are getting some, some nice earnings.

The market is trading at 22 times, uh, forward earnings for, well, for 2024 and 21 or more than 21 times the next 12 months. So, I mean, you know, if, if we're, and we're already up, you know, so since the beginning of two, 2023 we've had a 38 39% rally in the S and P 500 yet the earnings have only grown are expected to grow over the two years.Uh, we have to get a big increase in se in the second half.

And of course, with the thing with France, everybody is saying, don't worry about it, but we've seen what sovereign debt crisis have done in the past.

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