After the sharp August 5 decline, equities are nearing an attractive entry point. LPL’s Strategic and Tactical Asset Allocation Committee (STAAC) maintains its tactical neutral stance on equities, while actively monitoring signs of bottoming. LPL Research continues to preach patience before buying this dip. Bottoming is a process.

Investors had a healthy appetite for risk so far this year as a so-called potential soft landing has been factored in. We have an economy with rising wages, decelerating inflation, and a Federal Reserve (Fed) on the cusp of cutting rates.

The first half of the year was a challenging environment for a lot of fixed income markets, especially higher-quality markets.

With the release of the LPL Research Midyear Outlook 2024: Still Waiting for the Turn, in this week’s commentary we pull out key themes from the publication and add some context for our views given stocks have continued to rally — with Thursday a glaring exception as stocks sold off, somewhat surprisingly, after a good consumer inflation report.

LPL Research believes stocks have gotten a bit over their skis, but earnings season may not be the catalyst for a pullback in the near term given all signs point to another solid earnings season and stocks have mostly performed well during the peak weeks of reporting season in recent years.