As we move through 2024, both the stock and bond markets face a complex set of challenges and opportunities. In the equity market, the narrow leadership by large-cap tech stocks has raised concerns about market breadth and the potential for a broader correction. Investors may benefit from diversifying their portfolios beyond the top-performing mega-cap stocks and considering sectors that have lagged in the recent rally, such as industrials, energy, materials, and healthcare. The upcoming US presidential election adds another layer of uncertainty to the market outlook. Regardless of the outcome, fiscal deficits are expected to remain historically large, which could have implications for both equity and bond markets.
