Pimco Multi-Asset Strategies portfolio manager Erin Brown Robust earnings are reportedly helping to boost stocks, but there’s plenty of complacency in the market.

“If you look at the gains, they’re still pretty robust. Certainly we’re off the highs we’ve seen in the post-pandemic era and we’ve had a slight dip in earnings over the last two quarters. Still, earnings are fairly robust and at least company guidance still suggests that decent strong demand is on the way,” she said told Bloomberg TV.

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Browne observed stocks dragging higher as the market awaits the recession that appears to be knocking on investors’ doorsteps but has not yet materialized.

US markets have traded in the flat zone for the past two days after investors and traders weighed on a mixed batch of corporate earnings. The SPDR S&P 500 ETF Trust SPY closed down 0.017% on Wednesday during the Invesco QQQ Trust Series 1 QQQ 0.047% lost.

complacency: Noting that there is a lot of complacency when looking at stocks, the portfolio manager reiterated her view that there is a disconnect between bonds and stocks.

“The bond market is telling you that there are risks that are beginning to unfold, that you are beginning to see an economic slowdown, Inflation is falling, however it will still stay high,” she said.

“Equities, on the other hand, operate in the absence of any risk on the horizon. I think this split between stocks and bonds right now tells you a story that you know stocks really should be a bit more cautious as we go into the second half of this year,” she added.

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