PEEL BACK THE ONION: The stock market's 'real winners'

Core Insights - The market is experiencing a dual sentiment where both risk-on and risk-off assets are performing well, indicating a complex economic outlook with strong earnings growth and concerns over geopolitical issues and debt [2][3][4] Investment Strategies - Focus on high-quality companies that are less affected by market volatility, with an emphasis on midcap and small cap stocks that are currently undervalued compared to large caps and emerging markets [3][4] - Utilities have shown significant performance, up approximately 19% this year, and are trading at 19 times earnings, making them an attractive investment compared to the tech sector, which trades at 25-26 times earnings [5][7] - Consumer staples like Walmart and Costco continue to perform well despite rising costs, indicating pockets of opportunity in the market [8] Market Trends - The Russell 2000 index has seen record highs this year, reflecting a resurgence in small-cap stocks [5] - There is a notable increase in multibillion-dollar deals in the tech sector, raising concerns about the sustainability of profitability among companies like OpenAI, which is currently not profitable [9][12] - Historical parallels are drawn to the late 1990s tech boom, suggesting caution as some companies may not deliver the expected returns on investment [10][14]