We agree with the consensus view that stock valuations are elevated by traditional measures. But valuations should be considered in the context of the economic regime and earnings environment. Factoring in outlooks for economic growth, inflation, interest rates, and earnings, we are comfortable with the current 21 price-to-earnings ratio (P/E) for the S&P 500 Index. To justify a higher P/E and further moves higher from here, assumptions must be made about the path that these key drivers will take in coming months. We expect more of these factors to break positively than negatively, but it seems clear that a lot of optimism is currently bein

Risk appetite remains firmly intact as optimism surrounding a potential resolution to the war with Iran continues to improve investor sentiment. The S&P 500 has now advanced for eight consecutive weeks, with price action remaining remarkably resilient throughout the recovery. Since bottoming on March 30, the index has gained roughly 18% over just 39 trading sessions, producing an average daily gain of more than 0.8% while experiencing a maximum drawdown of only 1.2% during the advance. While easing geopolitical tensions and an ongoing ceasefire framework have provided a major catalyst for the rally, strong corporate earnings have also pla

The artificial intelligence (AI) boom has transitioned from an equity market narrative to a defining force in fixed income. Hyperscalers (Amazon (AMZN), Alphabet (GOOG/L), Meta (META), Microsoft (MSFT), and Oracle (ORCL)) are shifting from internal cash flows to substantial bond issuance to fund massive data center, graphics processing unit (GPU), and power infrastructure buildouts. This marks a structural change in investment-grade (IG) credit supply, with important implications for duration, spreads, sector composition, and portfolio construction.

In 2025, the five major hyperscalers issued approximately $121 billion in U.S. cor

Commodity market trends: Commodity markets have been on an impressive, and volatile, run so far this decade, with leadership oscillating between energy and precious metals. Not surprising, after commodities’ “Lost Decade” of the 2010s, given the asset class tends to move in long capital cycles.

Shift to Agriculture: LPL Research has written plenty on precious metals and energy and holds positive views on each. However, the focus this week is on a corner of the commodity complex that is just starting to break out and catch our attention — agriculture.

Supply constraints and geopolitics: Constra