BMO Wealth Management’s chief investment officer, Yung-Yu Ma, expects “consolidation instead of correction” in his second-quarter stock market outlook ahead of anticipated interest rate cuts.
“We expect more of a market consolidation instead of a correction,” Ma said. “The stock market doesn’t need Fed rate cuts or even falling inflation, but it’s also not in a robust position to quickly digest risks that could arise from accelerating inflation, increasing geopolitical shocks to oil prices or rising long-term interest rates.”
Recent consolidation among family office service providers has included the acquisition by the multi-family office Caprock of Grey Street Capital, the merger of venture capital fund Nemesis Technologies with the Japan-based single-family office PM Enterprise, and New York-based East End Advisors being bought by wealth and alternatives manager AlTi Global.
Family offices will want to pay attention to Friday’s March job report from the Bureau of Labor Statistics. The U.S. unemployment rate for February was 3.9%, an increase from January’s 3.7%. A continued rise in March could push unemployment to 4%, a level that has not been reached in 25 months.
“The market will be sensitive to any data point that hints at greater inflation in the pipeline, which is why Friday's jobs report is the next data point in focus for investors,” Ma said. “Job creation that is in line or even slightly below estimates would provide some comfort, as would a softer reading on hourly wages.”