The Bullish Case for Bonds Builds and the Swiss Franc Emerges as the World's Lone “Safe Haven” Currency
The S&P 500 is priced for strong earnings growth, yet the Beige Book and sharp sector declines highlight a slowing U.S. economy.
Key Takeaways
Markets Priced for Optimism: There is so much enthusiasm priced into the S&P 500 that the analyst community has baked in a +14% earnings growth assumption for 2026, double the historical norm and around triple the trend we are likely to see out of nominal GDP growth. That would be the best performance since 2021, when earnings were coming off the depressed 2020 pandemic recession. One can say that rate-cut expectations are providing an assist to stock market valuations, but a slate of Fed rate cuts is already priced in.
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