Investors expecting a new bull market to develop will likely be let down, according to Bob Doll, Crossmark Global Investments' chief investment officer, who sees limited run room for equities.
Global equities rallied last month on investor optimism that central banks have finished raising interest rates, bond yields will continue to retreat and economies will avoid recession, Doll noted in his weekly Doll's Deliberations newsletter Monday.
There's limited room for the stock market to advance significantly, however, given the economic cycle's late stage, valuation levels, already elevated U.S. corporate earnings and the risk that sturdy global economic growth will prompt central banks to keep rates steady in 2024 rather than cutting them, as markets expect, Doll explained.
"Equity investors betting that Fed rate cuts will both prevent a recession and somehow allow a new sustained economic reacceleration and equity bull market phase to develop are destined to be disappointed," he said.
