Canaccord Genuity's Tony Dwyer Predicts Better Distribution of Earnings Growth Will Help Stock Market Returns by Year-End

Canaccord Genuity's strategist forecasts improved stock market performance by 2024, citing balanced earnings growth and potential Fed rate cuts as tailwinds. Despite recent volatility, the market is in a bull phase, setting the stage for a positive year-end.

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Canaccord Genuity's Tony Dwyer Predicts Better Distribution of Earnings Growth Will Help Stock Market Returns by Year-End

Canaccord Genuity's Tony Dwyer Predicts Better Distribution of Earnings Growth Will Help Stock Market Returns by Year-End

Tony Dwyer, chief market strategist at Canaccord Genuity, forecasts improved stock market performance by the end of 2024, despite recent pullbacks driven by excessive optimism and rising interest rates. Dwyer remains optimistic about the market's prospects, expecting a strong finish to the year as the market progresses through the current corrective phase.

The strategist points to a more balanced distribution of earnings growth as a key factor supporting his bullish outlook. While the 'Magnificent Seven' stocks, which include tech giants like Microsoft, Apple, and Nvidia, have accounted for the entirety of earnings growth, Dwyer anticipates this dynamic to shift by year-end. He believes that as earnings growth becomes more evenly spread across the market, it will contribute to Asia Markets overall returns.

Dwyer also cites the potential for multiple interest rate cuts by the Federal Reserve as another tailwind for stocks. The recent market pullbacks, reminiscent of the situation in August of the previous year, are seen as a normal occurrence following a significant rally and heightened optimism. Dwyer maintains that the market is in a bull phase, and the corrective action will ultimately set the stage for a positive conclusion to the year.

Why this matters: The Stock Market Still Stocks performance has far-reaching implications for investors, businesses, and the broader economy. Dwyer's optimistic outlook, backed by expectations of improved earnings growth distribution and potential Fed rate cuts, provides a reassuring perspective amidst recent market volatility.

Despite the recent decrease in bullish sentiment among investors, with optimism falling to the lowest level since November, financial advisers remain strongly bullish. The market could experience further declines before reaching sentiment levels indicative of a bottom. Investors are closely monitoring corporate earnings results and guidance this week, which will either fuel additional dip-buying or trigger the next leg down for equities. As Dwyer notes, "The market has already priced in the impact of Higher Close as Investors Eye Meta Results, and that improved earnings growth distribution will lead to better stock market returns by the end of the year."

Key Takeaways

  • Canaccord Genuity's Dwyer forecasts improved stock market performance by end of 2024.
  • Earnings growth to become more evenly distributed, boosting overall market returns.
  • Potential for multiple Fed interest rate cuts seen as tailwind for stocks.
  • Recent market pullbacks viewed as normal after significant rally and optimism.
  • Investors closely monitoring corporate earnings results and guidance this week.