The S&P 500 (^GSPC) closed Tuesday above 5,500 for the first time ever, while June's ADP employment report revealed slowing jobs growth. JPMorgan Wealth Management global investment strategist Elyse Ausenbaugh joins Morning Brief to discuss the economy's health as Wall Street enters the second half of the year.

"All in all, we continue to see a labor market that remains rather robust and working in the favor of consumers with positive real wage growth. And I think we're finding ourselves in kind of this healthy slowdown that ultimately gives one of those key ingredients for the soft landing," Ausenbaugh explains. However, she notes that if the unemployment rate rises above 4%, it will begin to stoke concerns, and the Federal Reserve may not initiate an interest rate cut.

As the markets (^DJI,^GSPC, ^IXIC) continue to reach all-time highs, Ausenbaugh is comfortable with the current stock valuations: "In an environment where inflation concerns and risks are perhaps as great as recession risks — neither of which we think are particularly meaningful, our base case is for a soft landing — I think so long as that remains part of the equation, these valuations are actually fairly justifiable, particularly because the rally is being driven by these really profitable companies that are surprising to the upside."

Ausenbaugh believes that the election could cause market volatility in the second half of the year, especially as investors await the Fed's first rate cut. She also explains that earnings will be a major catalyst that will continue to push the S&P 500 to new heights.

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This post was written by Melanie Riehl