Many small-cap industries and sectors outpaced their large-cap counterparts over this 6-month period, a sign of the broadening equity rally and the role of other secular investment themes in play.
Outlook
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US inflation is expected to settle in the upper 2% range through 2026, a level historically linked to strong corporate profits and healthy equity market returns, creating a favorable economic backdrop.
Resource availability has a crucial impact on understanding the economics of many industries. In the defense and transportation area, China is the lead country to watch because of its dominant position in many rare earth materials.
Markets wobbled following the FOMC’s decision to cut interest rates, and Chair Powell's comments that the Fed may not adjust rates in December.
The credit spreads on the CDX High-Yield Index widened, which is noteworthy because stocks and credit spreads generally tend to move in the same direction. It also seems that free cash flow for stocks does matter.
Stocks achieved records for the fourth consecutive session this morning as AI enthusiasm, robust corporate earnings, trade deal optimism and dovish monetary policy expectations encouraged risk-taking on Wall Street.
As the calendar has now turned squarely into Q4, the sweepstakes for who will be nominated as next Chair of the Federal Reserve will no doubt increase. Current Chair Powell’s term does not end until May 2026, but according to published reports, it looks like the Trump Administration could make an announcement as soon as January.
AI investment fuels a $1.1 trillion capex surge in the S&P 500, with IT returns soaring post-tariff. Meanwhile, AI transforms marketing by making high-quality ad creation affordable and narrowing the gap between big brands and small businesses.
While trade tensions with China dominated the attention during the week, some bank news also captured investor interest. Stocks pushed higher last week, buoyed by strong third-quarter results posted by several money center banks.
Pavlov’s dogs became conditioned to associate a bell with a reward. Does that sound all that different from equity traders right now?
With the federal government shutdown delaying major economic data releases, investors are left navigating markets without key signals. While this shutdown does not include debt ceiling standoffs, it still clouds short-term visibility for the economy.
The S&P 500 fell by more than 2.7% on Friday, which came as a big surprise to many. While the size of the decline was certainly unexpected, the change in trend was not. So what can one expect to see next?