Smith: The numbers say you shouldn't be frightened

Core Viewpoint - The current market conditions are not alarming, with 83% of S&P 500 companies beating earnings expectations in the last earnings season, indicating a strong performance overall [1]. AI Trade and Market Dynamics - The AI sector is a significant focus, with its direct and derivative trades representing a large portion of the market [2]. - Investors are seeking opportunities in sectors that support AI, such as utilities, which have seen a 30% increase this year, making it the top-performing sector in the S&P 500 [4]. Utility Sector Insights - The demand for electricity driven by AI is expected to further enhance the performance of utility stocks, which have traditionally been viewed as stable but unexciting investments [4]. - The utility trade is anticipated to have more growth potential as the AI trend continues to evolve, with many companies still in the early stages of AI implementation [5][6]. Economic Landscape - The market is characterized by a "K-shaped" recovery, where some sectors are thriving while others face challenges, such as rising unemployment and mortgage deficiencies [7][8]. - Investors are encouraged to focus on individual company performance rather than broader economic indicators when making investment decisions [8]. Future Outlook - There is optimism for continued growth in the market, with bullish sentiments for 2026 based on current company earnings and trends [9].