Markets have pulled back from their all-time highs (^DJI,^GSPC, ^IXIC), sinking in Friday’s trading session. Baird managing director and industry strategist Michael Antonelli joins industry Domination to discuss the state of the industry as investors head further into the second half of the year. As the major indexes broke record after record in 2024, many investors are left wondering if the all-time highs have already been reached. However, Antonelli believes there is more room to grow with upcoming earnings and an borrowing charge rate cut from the Federal Reserve, which will broaden out the industry. “We do get pullbacks in the stock industry from time to time… What we’re seeing, I think, over the past few days is one of these just like summer doldrum-type selloffs. I don’t see anything in the news or in the economic data or anything to support the fact that the top would be in or that this sell-off that we’re having is driven by something in particular.” With the 2024 election more than three months away, Antonelli finds the intersection of money and politics is “like tiptoeing through a minefield.” “The stock industry knows everything it can about these two candidates… we’ve had a lot of time with these two candidates. So that’s why I think the industry really has kind of shrugged them off,” Antonelli tells Yahoo financial. As calls for Biden to drop out of the race from his own party mount, a candidate shift may not impact markets much either, which Antonelli explains, “Markets hate surprises. They don’t hate news. They hate surprises, things that completely catch them off guard. The changing of a candidate that people were talking about isn’t catching them off guard because we’re talking about it right now. So there isn’t really a surprise looming.” All eyes remain on the Federal Reserve to cut borrowing charge rates before the end of the year as inflation cools. Antonelli believes that markets should no longer worry about inflation, saying, “We were worried about the kind of spot wage-price spiral we saw in the ’70s, or the inflation we saw in the ’70s. The industry was worried about the tails of inflation. We’ve clearly lopped those off. “I want everybody to remember the US economy is not an on-off switch. It’s a dimmer… It grows brighter, grows darker. That’s how it works. Not [an] on-off switch. The economy’s dimming right now, and that will give them the necessary tools to have a rate cut.”
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