As US stock continue their rate cut-fueled rally, Evercore ISI senior managing director of equity, derivatives, and quantitative strategy Julian Emanuel, joins Market Domination hosts Julie Hyman and Josh Lipton to discuss his expectations for the market (^DJI,^GSPC, ^IXIC) amid macro uncertainty surrounding additional rate cuts and the upcoming presidential election.

“The Fed's [Federal Reserve] projections are inflation going lower and actually hitting the 2% target in 2026 and down to 2.2 in 2025… When you think about it within the context of the fact that we've had 525 basis points worth of tightening since March of 2022, I think the Fed wanted to send a message that it is cognizant of the risks, particularly in a volatile election year, and so that's why we started at 50,” Emanuel tells Yahoo Finance.

The strategist sees the market trading at 24-times trailing earnings which is "sustainable given the fact that there's a likelihood that earnings growth in 2025 is going to be as strong, if not stronger than 2024, and that the other 493 stocks in the S&P 500 are participating.”

“So what kills a bull market?” Emanuel says two things: undue speculation, which could come as froth or FOMO.

“We haven't seen it yet,” but “it's possible that we could start that cycle with what we've seen yesterday and today out of the Fed, but it's too early to really make that claim," he says. “The other thing, of course, is the recession, and again, when you look at the on-the-ground data, today's weekly jobless claims, the most relevant measure, [was] lower than expected. The economy is in good shape.”

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This post was written by Naomi Buchanan.