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The U.S. and European stock market rallies will continue, despite the US central bank perhaps not cutting rates at all until 2025, predicts the CEO of one of the world’s largest independent financial advisory and asset management organisations.

"Despite ongoing geopolitical risks, elections, the impact of economies moving at different clips, and attention on central banks’ paths to begin rate-cutting, we currently expect the high stock valuations to continue for the rest of 2024," says ​Nigel Green, CEO of deVere Group.

Green's comments come after global stocks climbed for a third week last week amid strong earnings growth, especially in AI-focused companies, and as investors await the US inflation report on Wednesday.

Green says there are two different narratives that support his analysis.

"First, is the expectation of sustained economic growth. The recent upward revisions in global economic forecasts by institutions such as the IMF and Bloomberg serve as additional fuel for the optimism fire.

"At the heart of the bullish sentiment pervading international markets lies the resilience of the US economy. Key indicators, including consumer spending, job creation, and corporate earnings, paint a picture of a nation on the path to continued growth. This robust performance serves as the backbone of confidence, instilling trust among investors in the stability and strength of the world’s largest economy."

In parallel, deVere Group cites a rebound in China, the world’s second-largest economy, and Europe's recovery as adding some buoyancy to the global economic outlook.

Green says a second narrative supporting the expectation of a continued stock market rally revolves around the anticipation of interest rate cuts in response to a potential economic slowdown.

​“Should this happen, and central banks cut rates in response, this would also be expected to bolster equities,” he explains.
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As the expectation of stock market rallies continues, the deVere CEO says savvy investors are likely to adopt strategic approaches to capitalise on the upward momentum while side-stepping potential risks.