1/3 The US IPO market is both a barometer of market health and an important source of new disruptive companies that drive long-term equity returns.

Despite all the buzz about Federal budget deficits and the dollar losing its reserve currency status, long-term Treasury yields are lower year to date, both in absolute and relative terms versus other major economy sovereign debt.

DataTrek: "While valuations are unquestionably high, the simultaneous tailwinds of positive earnings revisions and expected Fed rate cuts have been enough to keep stock prices moving higher." @inc.com www.inc.com/phil-rosen/s...

Q3 earnings revisions & absolute levels of bottom-line growth run in a very wide band among the 11 sectors in the S&P 500. Tech, Financials & Industrials are the levers of growth, and we still like all 3 groups. At the macro level, earnings revisions/growth explain recently low sector correlations.

DataTrek's Jessica Rabe: "These strong fundamentals should enable U.S. big tech to drive the S&P higher through year-end and also supports their (and the index’s) elevated valuations." @barrons.com www.barrons.com/articles/tec...

The S&P 500’s 100-day rally off the April lows was a +2 standard deviation move. Since 2010, there's been 5 other rallies of similar magnitude. In the 100 days after, the S&P averaged a return of +3.7% (+1.3% excluding the rally off the March 2020 Pandemic Crisis lows).

1/2 The value of any public company is a combination of what it earns today and what the market thinks it can earn in the future. For the 22 companies that make up 50.3 pct of the S&P 500, current stock prices discount future earnings that are 2 – 3x current levels...

US Investment Grade corporate bond spreads over Treasuries are now 0.75 percentage points, +2 standard deviations below the 2010 – 2019 mean and tied for the lowest levels since 2010. This risk-averse market, just like equities, is expressing robust confidence in the US economy.

Chair Powell sees the FOMC’s “Dot Plot” as a probabilistic model. Using this paradigm, the 2026 Dots are quite close (1 rate cut) to where Fed Funds Futures see rates in December 2026.

The Nasdaq Comp is making a new all-time high today. DataTrek's Jessica Rabe helps explain why in her video below. Don't miss it! youtu.be/uwnrSAu2jf8?...

The S&P 500’s CAPE ratio (PE based on trailing 10-year earnings) is now 40x, officially back to Dot Com Era levels. Large cap Tech trades for 30x forward earnings. Tech + Big Tech is now 48% of the S&P 500, and the 22 largest Tech/non-Tech names are +50% of the index.

On average, the dollar was largely unchanged last week vs. developed/emerging market currencies. The S&P 500 outperformed MSCI Europe and Japan but lagged EM equities.

The S&P 500 trades for 19x 2027 earnings, if these grow by 13% in 2026 and another 15% in 2027. Worth noting: S&P earnings have only compounded at 8.5% annually over the last decade.

DataTrek's Nick Colas: "Yes, part of [Chair Powell's] motivation here is to preserve the FOMC’s options... But the fact that he needs to do that about near-term rate decisions is telling." @cnbc.com www.cnbc.com/2025/09/18/t...

Wall Street analysts tend to cut their earnings estimates as the year progresses, but right now they're bumping numbers higher for almost every US Big Tech name. Check out our latest video! youtu.be/uwnrSAu2jf8?...

In our latest video we show how US Big Tech – save TSLA – has superior earnings estimate momentum for calendar Q3/Q4 2025 & 2026, much better than the S&P 500 as a whole. Watch below! youtu.be/uwnrSAu2jf8?...

Chair Powell said there was not widespread support for a 50 basis point cut today. That's good news. DataTrek's Nick Colas explains why in the video below: youtu.be/gAxH4LE8WKk?...

1/2 There’s a certain amount of wisdom behind “If it’s not broke, don’t fix it” and quarterly financial reporting fits that saying. The current 90-day cadence has been in place since December 1970 & it's hard to argue with the results...

There is no proof that requiring US public companies to publish quarterly results diminishes equity returns, dampens long run investment, or makes American stock markets less attractive listing venues.

DataTrek: "We continue to like gold, even after its recent large gains, since the current investment environment remains conducive to more upside." @barrons.com www.barrons.com/articles/gol...

The idea of reducing US corporate financial reporting cycles to semiannual from quarterly sounds good in a bull market. When the economy falters and profits slide, however, investors want all the information they can get. That alone makes quarterly reporting worthwhile.

Fed Funds Futures came into today expecting a 25 bp rate cut, 2 more this year, and 2-4 more in 2026. We doubt that either Chair Powell or the FOMC will come anywhere close to blessing that sort of dovish outlook.

Gold is up 43% over the last 12 months, a statistically unusual gain (2 standard deviations based on data from 2000 – present). We still like the yellow metal here because the current setup is an amalgam of prior periods of strong gains for gold prices.

In our latest video with @downtownjoshbrown.bsky.social, we show why Tech and S&P 500 valuations are pushing on dot com levels and can go even higher if fundamentals hold. Watch below! youtu.be/gAxH4LE8WKk?...

DataTrek's Nick Colas: “This riskiest part of the fixed-income market has a good record of reflecting excessive macro confidence and is not yet flashing a warning signal." @barrons.com www.barrons.com/articles/jun...

1/2 The S&P 500 now trades for 24.6x/21.7x estimates of 2025/2026 earnings. The only path to meaningful (+10 pct) upside from here requires some combination of positive earnings momentum and even higher valuations...

Small cap Tech has been leadership over the last 100 days, beating the S&P 600 by 15.8 points (an almost 3 standard deviation move). While that’s uncommon, it comes after a long period of underperformance.

In our latest video with the always insightful @downtownjoshbrown.bsky.social, we discuss why history shows a 50 basis point Fed rate cut is bad news and much more. Check it out! youtu.be/gAxH4LE8WKk?...

You do not want to see a 50 basis point cut in interest rates this week. Nick Colas explains why on an all new What Did We Learm? youtu.be/gAxH4LE8WKk?... @datatrekresearch.bsky.social

1/2 Chinese air quality readings across the country’s 5 largest cities by GDP contribution confirm the economic slowdown reflected in official gov data. The local economies in Beijing & Chongqing appear to be reaccelerating this month, but growth remains sluggish in Shanghai, Shenzhen & Guangzhou...

Wall Street analysts have increased their quarterly estimates by +0.6 to +0.9 percent for Q3 and Q4 2025 and +1.1 to +3.5 percent for Q1 and Q2 2026, respectively. As a result, analysts now expect the S&P to post record earnings every quarter over the next year.

CCC and lower-rated US corporate bond spreads are currently higher than their 2010 – 2019 average. This riskiest part of the fixed income market has a good track record of reflecting excessive macro confidence and is not yet flashing a warning signal.

Markets expect the FOMC and Chair Powell to tilt dovish this week, cutting rates by 25 bp and blessing 2 more reductions this year.

Wall Street analysts continue to increase their aggregate 2025/2026 S&P 500 earnings estimates, an unusual and bullish development this late in an economic cycle.

Forward PE multiples have increased for almost every S&P 500 sector this year, but the outperforming groups have on average also seen improvements in expected earnings growth. By this analysis, Financials look very attractive even though they are modestly underperforming YTD.

The history of Fed rate cuts back to 1990 shows that 50 basis point reductions almost always occur during or just after a recession. We expect the FOMC to cut by 25 basis points next week to avoid sending the wrong signal about their views regarding the US economy.

The S&P 500 is up +20.8 pct on a price basis over the last year, more than double its 1990 – present average of +9.8 pct. This strong gain is not a reason to be bearish, however. Over the last 35 years, forward 1-year returns have averaged 10.8 pct after similar gains, with a win rate of 82 pct.

The S&P 500 is well known for being concentrated in a handful of names, with the top 3 stocks (NVDA, MSFT, APPL) comprising 21 pct of the index. Sector concentrations are even higher, however. Only 1 group (Industrials) has less top 3 stock exposure than the S&P.

Gold is now outpacing Bitcoin by more than 2:1 in 2025 (+33.1 vs. +15.9%).

1/3 US large cap (Nasdaq, S&P 500) & small cap equities aren’t just superior to rest of world stocks when it comes to longer-run returns, but also in their ability to make money most of the time over multiyear periods...

US small cap Growth has been a consistent winner versus its Value counterpart since 2010, recently outperforming by 5 percentage points. This is within normal bounds and does not signal an impending rotation back into Value.

The Russell 2000 has outperformed the S&P 500 over the last 100 days, an unusual occurrence in the 2023 – present bull market. We’ve been calling for this move but, without a fresh catalyst, we are concerned it may fade over the next 100 days.

DataTrek's Nick Colas: “The next important market catalyst will be Nvidia’s earnings on Wednesday after the market close... it could either swamp or turbocharge the usual post-Fed-chair move higher” following Jackson Hole speeches." @marketwatch.com www.marketwatch.com/story/stock-...

Revenue/earnings growth was much better during the late 1990s than over the last 5 years. If Gen AI is as transformational as Internet 1.0, Big Tech rev/earnings growth could/should – accelerate from here. Given these companies’ strong internal fundamentals, already high valuations could expand.

US Investment Grade (IG) corporate bond spreads just hit lows last seen in July 1998 (0.77 percentage points), even lower than just after the November 2024 US general elections. Just as with stocks, the corporate bond market is extremely confident in US economic growth.

This year is only the second time in Fed Chair Powell’s tenure that the S&P 500 fell in the week leading up to his Jackson Hole speech. History suggests the index should continue Friday’s rally this week, but Nvidia’s earnings release on Wednesday will also inform market direction.

While Chair Powell’s Jackson Hole speech was a pleasant surprise for equity markets, Fed Fund Futures barely moved. They continue to discount a 25 basis point cut in September and again in December.

Mutual fund/ETF investors turned positive on US stocks last week, helping propel the S&P to a fresh high. Given their general wariness, however, this bullishness may not continue.

The equal weight S&P 500 has recently underperformed the traditional cap weighted version of the index by +2 standard deviations. This suggests that further rotation into cyclicals/non-Tech is likely.

The @atlantafed.org's GDPNow model is currently predicting Q3 growth of 2.3% based on July’s economic releases. The current quarter is picking up right where Q2 left off.