From CNBC: 2024-03-31 17:00:01

The Federal Reserve may cut rates further in the second quarter due to a deteriorating jobs market and easing inflation concerns. Canaccord Genuity’s Tony Dwyer believes falling employment survey participation rates are impacting BLS data. Officials tentatively planned to slash rates three times this year at the March policy meeting.

Dwyer expects rate cuts to benefit financials, consumer discretionary, industrials, and health care stocks. He advises buying into the broadening theme on weakness rather than mega-cap weighted indices. Market performance is expected to become more even by the end of 2024 into 2025. The S&P 500 just posted its strongest first quarter gain in five years.

A broadening of earnings growth participation is evident beyond the “Magnificent Seven” tech stocks. The S&P 500 rose to a record high and the market is up 17%, while the broader market is up 10%. Dwyer suggests waiting for a better opportunity in the market, likely when there is worsening employment data to prompt rate cuts.

Read more: Fed must cut rates more aggressively due to jobs: Canaccord Tony Dwyer