Investors had a healthy appetite for risk so far this year as a so-called potential soft landing has been factored in. We have an economy with rising wages, decelerating inflation, and a Federal Reserve (Fed) on the cusp of cutting rates.

The first half of the year was a challenging environment for a lot of fixed income markets, especially higher-quality markets.

With the release of the LPL Research Midyear Outlook 2024: Still Waiting for the Turn, in this week’s commentary we pull out key themes from the publication and add some context for our views given stocks have continued to rally — with Thursday a glaring exception as stocks sold off, somewhat surprisingly, after a good consumer inflation report.

LPL Research believes stocks have gotten a bit over their skis, but earnings season may not be the catalyst for a pullback in the near term given all signs point to another solid earnings season and stocks have mostly performed well during the peak weeks of reporting season in recent years.