Lebovitz also commented on the potential squeeze on company profits due to decreasing consumer demand and a cooling labor market. He believes that these factors will undermine the pricing power that has kept many companies afloat, leading to a significant squeeze on margins. This comes amidst warnings from other market experts, including economist David Rosenberg, who suggest that the current stock rally could be indicative of an impending recession.
Key takeaways:
- The 2023 stock rally is under threat due to potential banking chaos and waning consumer demand, according to JPMorgan Asset Management strategist David Lebovitz.
- Lebovitz believes that the market has more room to run in the near term, but sees potential obstacles in the form of the Fed slowing its interest rate hikes and injecting liquidity into the markets.
- US stocks have seen significant growth in 2023 due to an AI-fueled tech boom, with the S&P 500 and Nasdaq up 17% and 39% respectively.
- Lebovitz also commented on company margins, predicting that sticky costs will weigh on firms' pricing power and squeeze margins more significantly.