In their Mid-Year Update, Robert W. Baird & Co. Inc. chief investment strategist Bruce Bittles and investment strategist William Delwiche describe the current economic environment as neutral, but see the possibility of a shift toward bullish in the second half of the year.
“The message at mid-year is caution now, but opportunity later,” the strategists said. “To be sure, we do not know how the second half will unfold, but it is not difficult to envision a more constructive environment as we move through the second half.”
Contributing to this positive outlook is the expectation that the Federal Reserve will raise short-term interest rates, and seasonal patterns and momentum could improve.
At the moment, the strategists advise waiting and watching, committing only to the right opportunities.
“The overall policy backdrop has become more supportive of economic growth,” the strategists said.
Leading indicators suggest the economy remains on solid footing, and while business activity has moderated, it isn’t showing signs of economic or stock weakness.
To see the full Baird Mid-Year Update, click here.