UBS' Julie Fox expects the Fed's first rate cut to happen in September

We have this year where obviously great gains, almost 15% for the S&P, only a 5% pullback along the way, yet a lot of complaints that it's just all been big growth over everything else and and maybe the economic message of the market isn't that strong. How would you be advising investors to navigate the second-half? I think right now the markets trying to tie up a few loose ends. How does inflation and job growth look over the next few months? How will the Fed react? How are earnings fair over the next few quarters? Earnings season begins in mid-july again and how the political uncertainty, the presidential election may affect markets. Now ultimately, we don't think any of these factors will cause sustained moves lower in the market, but we also don't see the broader market rising too much further from current levels. Our year end S&P 500 target is 5500. We're very close to that level. Now, but again, we're up 15% so far this year. So I think the bottom line is we think upsides muted for stocks this year, although there can always be volatility. The economic data reports, the jobs data, the inflation data, that's going to be key for markets and it's important to stay invested. If it's important to stay invested. Look, if you're an index investor in the big cap, you know S&P 500, you should be pretty happy, but you suggest maybe the index doesn't have a ton of upside. So within the market, where would you be looking to to emphasize? I think there's really three key sectors right now that we're focused on. The 1st is tech. We remain constructed upon technology stocks even with the run the sector has had over the past year. Valuations for tech stocks are high and higher than their long term average, but many of these companies are very profitable. They're on a firm foundation and many of them will get bigger as AI is developed and serves more use cases. So I think tech is an important part of a portfolio. We also believe that the AI investment case remains intact. And then we like industrials. Those should benefit from resilient economic growth, improving manufacturing sentiment and the tailwinds from the industrialization of the US economy. And then lastly, small caps, I think while there's a lot of Federal Reserve uncertainty, we think the Feds next move will be a rate cut starting in September. And rate cuts tend to benefit small cap stocks stocks as those stocks are more reliant on debt. They're lower cost of capital that helps profitability with the small cap stocks. Yeah, that has been, you know, kind of a a big albatross on that group. We'll see if the the path to Fed rate cuts changes that at all. Julie, thank you very much.