Corient partner and wealth advisor Amy Kong joins Market Domination hosts Julie Hyman and Josh Lipton in a discussion about what this week’s economic data means for expected interest rate cuts and what’s next for the market after the focus shifts beyond the first cut.

“We are certainly at a point where the surge of purchases” seen during the lockdown “is well behind us,” Kong says, noting that “going forward, we are starting to see that the consumer is moderating.”

“I'm not necessarily calling a recession, but certainly we are seeing a healthy moderation,” the strategist says, explaining that current market normalization is “all normal with regards to what we've seen over the past couple of years post COVID."

Kong tells Market Domination that all signs point to a 25-basis-point cut from the Federal Reserve next week, noting that subsequent cuts will be “really data-dependent.”

“The first couple of rate cuts” could function as "a normalization of the monetary policy,” with key economic indicators like the Consumer Price Index (CPI) and the Producer Price Index (PPI) showing inflation slowing from levels seen last year. "The environment today does not call for such a restrictive policy."

As the Fed considers rate cuts, macroeconomic uncertainty weighs heavily on investors; Kong notes that corporate earnings "continue to be a very good support for the system.”

Earnings-driven gains are “exactly why the markets are still trading at the valuation levels that we're seeing today,” with much of this growth being driven by tech companies, including the Magnificent Seven and artificial intelligence-related companies, Kong says, adding that if tech strength persists, “stock market conditions continue to be in a favorable place.”

The analyst underlines that "the conditions can soften” and investors shouldn’t necessarily expect “a straight line up” as there “could be some ebbs and flows.”

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

This post was written by Naomi Buchanan.