Macro views

Markets, mandates and model maneuvers

July 16, 2024 - 2 min read

Portfolio Manager and Lead Portfolio Strategist – Natixis Investment Managers Solutions

Brian Hess

VP, Investment Strategist – Natixis Investment Managers

Jack Janasiewicz and Brian Hess discuss earnings estimates, growth expectations, rate cuts, the Magnificent 7, and positioning in the Natixis model portfolios.

The earnings outlook has seen a fishhook effect with no significant revaluation of earnings estimates. Typically, they drop somewhere between 8% and 9% but have only come down about 4%.
The Fed is basically signaling the all-clear sign for a potential rate cut in September, but we aren’t there yet as the growth backdrop may be slowing.
As for the Fed’s dual mandate, the unemployment rate has moved back above 4%, up about 60 basis points off its lows, and there is more disinflation on the wages front. However, inflation is lowering.
There have been a fair number of price cuts within the retail space, so the margin backdrop bears watching to see if compression sets in.
The Natixis model portfolios went back to neutral stocks vs. bonds, which had been overweight equities. Overweights in small-caps and mid-caps were eliminated in most models and went back to underweight developed international stocks.

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Investing involves risk, including the risk of loss. The views and opinions are as of July 9, 2024, and may change based on market and other conditions. This material is provided for informational purposes only and should not be construed as investment advice. There can be no assurance that developments will transpire as forecasted. Actual results may vary. Although Natixis Investment Managers believes the information provided in this material to be reliable, including that from third-party sources, it does not guarantee the accuracy, adequacy or completeness of such information.

Natixis Advisors, LLC provides advisory services through its division Natixis Investment Managers Solutions. Advisory services are generally provided with the assistance of model portfolio providers, some of which are affiliates of Natixis Investment Managers, LLC.

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