As companies continue to surprise with their first quarter earnings reports, delivering better-than-expected results, some investors believe that these beats alone may not be sufficient to sustain market growth. UBS Investment Bank Chief Strategist Bhanu Baweja joins Catalysts to provide insights into market outlooks for growth.

Baweja views market upside as "reasonably limited" due to high stock valuations. However, he acknowledges that companies still maintain high margins, staples companies excel, and the earnings picture remains "reasonably robust." Nonetheless, he believes the economy is headed toward "a palpable slowdown," potentially affecting earnings results in the coming quarters.

"You could actually see the market going sub 5000 before it rises up again because we do need a reality check in terms of earnings expectations for next year and year after next," Baweja told Yahoo Finance.

Baweja notes that markets are currently expecting strong growth due to high earnings coupled with low inflation. While this dynamic was visible in 2023, Baweja cautions that it is not likely to persist.

For more expert insight and the latest market action, click here to watch this full episode of Catalysts.

This post was written by Angel Smith