According to a top executive at financial giant Piper Sandler, the firm remains optimistic on equities despite concerns about an artificial intelligence bubble and a soft labor market.
In a recent interview with CNBC, Michael Kantrowitz, the chief investment strategist at the investment bank, highlighted that the equities market is experiencing a broadening trend for the first time in around four years.
“The macro data and the breadth of earnings data are providing the foundation to address these concerns. The rotation in the market since October reflects how these worries are being addressed,”
Kantrowitz pointed out that the weak jobs data played a role in the Federal Reserve’s decision to cut rates, contributing to the positive outlook in the market.
“The combination of rate cuts, declining 10-Year yields, lower mortgage rates, reduced oil prices, and upcoming fiscal stimulus initiatives have set the stage for a broader macroeconomic growth and earnings expansion, leading to the first sustainable rotation in four years,”
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