The stock market is expected to gain 2% by year-end, as earnings reports show strong revenue and earnings beats. Companies are managing inflation by passing on limited price increases and maintaining margins. Interest rate concerns have subsided, and earnings growth is now the focus. While earnings growth projections are low, they could be exceeded, potentially boosting the market further. Companies are also considering altering service terms instead of raising prices to maintain market share.
The Federal Reserve (Fed) may lower interest rates this year despite ongoing high inflation. This is according to BlackRock CEO Larry Fink, who believes the Fed may struggle to meet its 2% inflation target. Fink suggests inflation could stabilize around 2.8-3%, which he would consider a victory. Despite current market expectations for a more dovish Fed, some officials remain cautious until they witness a significant decline in inflation.
The housing market is facing difficulties with high interest rates, affordability concerns, and a slowdown in sales. However, there are positive signs: inventory is increasing, and prices in some areas are declining. Experts predict that prices could continue to fall as the market stabilizes.
