Moderating oil prices and the successful end of quantitative easing should give stocks a boost in the third quarter, according to Lisa Emsbo-Mattingly, Fidelity’s director of asset allocation research.
“With consumer spending picking up, I could see retailers and consumer durables doing well,” she writes. “Many consumer cyclicals could also benefit. If Chinese officials can get the balance right between inflation control and growth, this could also translate into gains for industrial and materials companies.”
Stocks appear to have more upside than fixed-income heading into the third quarter, she concludes.