Valuations appear stretched but not quite at 90s levels, says Guggenheim's Anne Walsh

Market Overview - Current market valuations appear stretched, prompting caution among investors despite record highs in the S&P and NASDAQ [1][2] - The market is described as "a little bubbly" but not at the extreme levels seen during the dot-com era, indicating a more stable environment [2] Economic Fundamentals - Strong fundamentals are noted, particularly in sectors like artificial intelligence and capital expenditures, which are expected to drive future stock performance [3] - The largest companies with robust balance sheets are leading market activity, contrasting with smaller businesses that are slower to respond [5] Interest Rate Outlook - The Federal Reserve has recently cut rates by 25 basis points, with expectations for two more cuts this year, reflecting a more aggressive stance compared to peers [7] - Projections suggest continued rate cuts into 2026, with a potential move towards a lower neutral rate [9] Employment and Economic Growth - Recent employment data indicates a slowdown, with only 17,000 jobs created last month, the weakest since the post-recession recovery began in 2020 [10] - The economy is normalizing towards sub-2% growth, which may provide the Fed with the opportunity to continue lowering rates [12]