Investing.com -- In a note Wednesday, Alpine Macro shared insights from their discussions with investors, highlighting five of the most frequently asked questions regarding the current market landscape.
The firm said it spent a large amount of time over the past two weeks
speaking with clients at its New York Macro Conference and on the road across the United States. Here are the five most asked questions:
First, the firm said many investors are asking about the preference between S&P 500 equal-weighted or cap-weighted indices.
According to Alpine Macro, the current economic phase favors a broader market "melt-up" driven by cyclical sectors rather than mega-tech dominance, suggesting an advantage for the equal-weighted index, particularly with its exposure to value and dividend yield sectors.
Second, they said questions about U.S. political gridlock's impact on equities have surfaced.
Alpine Macro points out that gridlock under a potential Trump presidency would likely foster deal-making favorable to stocks, while a Harris presidency could lead to more episodes of brinkmanship and heightened volatility.
Third, there's been significant interest in small-cap fundamentals, according to the firm.
Alpine Macro believes small caps are poised to outperform large caps due to their deeper sensitivity to interest rate cuts and potential earnings growth in sectors like technology and biopharma.
Fourth, investors are said to be closely watching China's stimulus measures.
Alpine Macro notes that China's aggressive stimulus could spur global manufacturing recovery and boost sectors with international exposure, such as materials and industrials.
Finally, expectations for the Q3 earnings season are reportedly mixed, with Alpine Macro forecasting earnings growth of 5-6% year-over-year, with positive surprises likely as companies adjust to the macro environment and emphasize AI's impact on profitability.
These key takeaways provide investors with valuable insights into navigating the current economic and market landscape, according to Alpine Macro.