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September is a historically weak month for stocks, but the first U.S. Federal Reserve rate cut in four years meant that markets have mostly bucked the trend so far. The S & P 500 has risen around 1% month-to-date, and jumped about 8% since the end of June when stocks went through much volatility. But risks such as the U.S. election, inflation and geopolitical conditions raise the question of what the path ahead will be like for stocks. David Bianco, chief investment officer (Americas) at DWS, said in a note last week that the Fed “seems to care much more about protecting against a downturn, than about any potential upturn in inflation. I think [the rate cut] move decreases the odds of a recession, and I expect that the yield curve will now steepen as a result.” “In my view, the banking sector could win … as should solid growth stocks – at reasonable valuations – in the healthcare and software sectors,” he added. Simon Webber, head of global equities at U.K. asset manager Schroders, said “Equity markets were vulnerable to a correction after a very strong nine months, but company fundamentals are decent and heightened volatility creates opportunities for repositioning where dislocations occur.” U.K. remains one of the most attractively valued markets globally relative to its long-term history, he said. Valuations in the U.S. market look “less demanding” — if you exclude Big Tech, mega-growth stocks, which are dragging up the overall price-to-earnings multiple of the S & P 500, Webber added. Against that backdrop, CNBC Pro used FactSet to screen the S & P 500 and the MSCI World index to find out which stocks have already beaten the market this year — but could still come out ahead in the second half of the year and beyond. These are the criteria we used: Up more than 13% so far in 2024. At least half of analysts rate the stock a buy. Consensus price targets offering upside of at least 20%. These stocks showed up.
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