Market Overview - The market experienced a strong week, particularly for small-cap stocks, with the Russell 2000 hitting a new record high [1] - The Federal Reserve's interest rate cut of a quarter point provided a boost to the market [1] - Earnings remain strong, suggesting a potential "Goldilocks" economy [1] Investment Strategy - Citigroup recommends a barbell strategy, favoring growth with a cyclical bias [3] - As the Fed eases further, a shift towards small and mid-cap stocks (SMID) is suggested, anticipating an earnings recovery into 2026 due to Fed stimulus [4] - Pullbacks should be aggressively bought into, expecting a strong finish to the year [8] Earnings Analysis - Earnings growth is broadening beyond AI-related companies, with evidence seen in Q2 and expected to continue in Q3 [5] - The S&P 500's capitalization is roughly split, with half attributable to AI-related companies and the other half to economic-sensitive and defensive sectors [6] - Expectations for Q3 earnings are high, requiring strong performance to meet the raised bar [8] S&P 500 Outlook - Citigroup has reached its initial year-end target of 6,600 for the S&P 500 and has a "Super Bowl case" target of 7,200 [8] - Achieving the 7,200 target requires 2026 earnings estimates to increase beyond Citigroup's current estimate of $38 per share for the S&P 500 [9] - The S&P 500's fundamental backdrop is structurally in good shape [11]

Market Overview - All four U.S. equity benchmarks closed at record highs on Thursday, with the Dow at 46,142.42, S&P 500 at 6,631.96, Nasdaq Composite at 22,470.72, and Russell 2000 at 2,467.70 [3] - The U.S. equity markets opened with the Nasdaq leading at +0.44%, followed by S&P 500 at +0.27%, Dow at +0.20%, and Russell 2000 at -0.02% [1] Current Market Sentiment - There is a lack of significant market-moving events today, allowing investors to digest recent information and take a breather [4] - No earnings calls are scheduled for today, indicating a quieter day in terms of corporate announcements [5] - There are no major economic events occurring today, with impactful data expected only on Monday [6]

Core Insights - The article emphasizes the importance of sales growth over traditional earnings metrics for evaluating stocks, especially in volatile market conditions [2][3][10] - A selection of stocks with strong sales growth and cash flow is recommended, including Universal Health Services, Methanex, Arista Networks, Voya Financial, and Maximus [2][10][12] Sales Growth as a Metric - Sales growth is preferred as it reflects actual demand for a company's products or services, providing better visibility into the durability of the business model [3][5] - Companies that can expand their sales during economic stress demonstrate pricing power and competitive advantages [3][5] Earnings Limitations - Earnings can be misleading due to one-off charges, cost-cutting, and accounting adjustments, making them less reliable indicators of a company's trajectory [4] Cash Flow and Financial Flexibility - Sustained sales growth leads to stronger cash flows, allowing companies to reinvest in innovation, expand markets, or return capital to shareholders without excessive debt reliance [5] Stock Selection Criteria - Stocks are shortlisted based on criteria such as 5-Year Historical Sales Growth greater than industry average and Cash Flow exceeding $500 million [6] - Additional metrics include P/S Ratio, % Change in Sales Estimate Revisions, Operating Margin, Return on Equity, and Zacks Rank [7][8][9] Recommended Stocks - Universal Health Services (UHS) is expected to have a sales growth rate of 8.5% in 2025 and holds a Zacks Rank of 2 [11][12] - Methanex (MEOH) anticipates a sales growth rate of 5.6% in 2025 with a Zacks Rank of 1 [12] - Arista Networks (ANET) is projected to achieve a sales growth of 25.4% in 2025 and has a Zacks Rank of 2 [13] - Voya Financial (VOYA) expects a sales growth of 16.1% in 2025, also holding a Zacks Rank of 2 [14] - Maximus (MMS) forecasts a sales growth of 2.7% in fiscal 2025 and has a Zacks Rank of 1 [15]

Market Outlook & Investment Strategy - Goldman Sachs encourages clients to stay invested and deploy incremental capital over 6-18 months, anticipating potential drawdowns [2] - The market has an 80% probability of experiencing a 10% drawdown, but valuations are not always reliable predictors of market performance [3] - Family offices are looking to decrease cash holdings by 30% over the next 12 months, shifting towards public and private equities [5] - There is significant "right tail risk" in the market, suggesting potential for further upside [7] Economic Factors & Fed Policy - $73 trillion is sitting in money market funds, which could move into risk assets as rates decline [8] - The Fed anticipates a slowdown followed by reacceleration, driven by fiscal and monetary stimulus, and a weaker dollar [9] - Fiscal stimulus is expected to increase cash flow for consumers and corporations [10] AI & Earnings - AI capex has doubled in the last two years, from $150 billion to $300 billion, but remains at 50% of cash flows, unlike the tech bubble [12][13] - The top five stocks have a return on equity (ROE) of 65% and grew over 20% in the first half of the year [14] - The market is more driven by earnings than the overall economy [16] Market Positioning & Sentiment - Client sentiment is mixed, with wealth management clients being neutral to risk-on [4] - Hedge funds are at the 40th percentile of net long positioning, and mutual funds are holding $170 billion in cash, indicating relatively light positioning [6] - The market is expected to hover around current levels until the end of the year, with a moderate upward trend in 2026 [17] Small Caps vs Large/Mid Caps - Small caps have been performing well, but last year the S&P outperformed small caps despite rate cuts and GDP growth [18][19] - Goldman Sachs prefers large and mid-cap stocks [19]

We'll turn now to Cracker Barrel. Company reporting its fourth quarter results and Yahoo Financ's Brooke Depal joins me here to break it all down. Investors don't look so happy with this one.Brooke, investors not too pleased and that's largely because of the outlook that the company provided. The company did say that they now expect total revenue for the fiscal year between 3.35% billion to 3.45% billion. that they said assumes a comparable sales or rather a comparable store traffic decline of between 4 to ...

Let's bring in private wealth chief market strategist Carol Schliff and region's wealth management CIO Alan Mcnite. Guys, welcome. Allan, you didn't get a whole lot of new information here, but at least the Fed in its initial decide on a decision on a quarter point was mostly aligned.I mean, they've had more descent in the past. What does that say about the future. I think the most positive thing for us was there wasn't this major surprise.We had so much aida and angst going into this where it was going to ...

Core Insights - Emerging Markets (EM) represent 10-15% of global equity market capitalization, which is significant but often overlooked due to poor performance in recent decades [1][2] - Over the past 15 years, EM has returned 4.6% annualized compared to 11.4% for Developed Markets (DM) and 7.3% for developed international markets, leading to a prolonged period of underperformance for EM [2][3] - In 2025, EM has shown a strong recovery, up approximately 21% compared to 13% for broader markets, indicating a potential shift in investor sentiment [3] Resilience and Market Dynamics - Despite rising central bank rates from near zero in 2021 to 5.5% by the end of 2023, EM has shown resilience, managing the hiking cycle better than in previous cycles [4][5] - The overall growth and increased diversification in EM have made these markets less risky than in the past, with decreasing headwinds as rates begin to decline [5] Valuations and Earnings Growth - EM typically has lower valuations, with a current multiple spread of 20.4x for DM and 13.8x for EM, which is historically wide and supportive of EM investment [6][7] - Relative earnings growth has slowed due to a more tariffed global trade environment, but this is not seen as an insurmountable challenge [8] Flows and Currency Trends - Incremental capital is increasingly flowing into international markets, including EM, which may benefit from a weaker US dollar, historically a positive factor for EM performance [9][11] - Many developing economies in EM are resource-rich, which may enhance their currency strength in a context of inflationary pressures in developed economies [12] Concentration Issues - A concentration problem has emerged within EM, particularly with significant price appreciation in markets like China (up 45%), Hong Kong (60%), and Taiwan (30%) over the past year [13][14] - The high concentration in technology sectors within these markets raises concerns, as many investors may not be aware of the risks associated with this concentration [15] Final Thoughts - Despite some challenges, including slowing earnings growth and concentration risks, the positives for EM investment are seen to outweigh the negatives [16][17] - Attractive valuations and increasing international fund flows suggest that EM may capture a larger share of investment, especially if the US dollar continues to weaken [17]

We begin this hour with stocks hitting another all time high as investors eye a Fed rate cut for Quincy. Jp morgan rising markets have recovered to new record highs. If policy rates come back into focus, equity valuations are now elevated and markets will struggle for.Joins us now for more folk. Good morning. Good morning.It's good to see you. Let's just go through where things are at right now. Earnings, good jobs data, not good Is one much more important than the other.Yes, it's always about the earnings. ...

Market Debate - US President Donald Trump reignited a long-standing debate over the requirement for publicly-traded US corporations to report earnings at quarterly intervals [1] Reporting Frequency - The debate concerns the frequency of earnings reports, which have been quarterly for over half a century [1]

Market Overview - The market is currently experiencing record highs, with the S&P 500 above 6,600 for the first time, and global markets also reaching all-time highs [1][3] - There is an 80% chance priced in for three rate cuts by the end of the year, which could lead to a small risk of a market setback if expectations are not met [2][10] Earnings and Sector Performance - Earnings remain the primary driver of market performance, with Oracle's recent surge attributed to strong earnings [6][7] - The technology sector continues to show strong earnings momentum, while small and mid-cap stocks are also gaining traction [8][14] International Markets - The company maintains a "team USA" stance but has increased exposure to emerging and developed international markets, particularly Japan [15][18] - Currency fluctuations are a significant factor driving international market performance, with forward earnings estimates for developed markets being negative on a 12-month basis [16] Historical Context - Historically, when the Fed cuts rates at market highs, the markets have generally moved up over the following 12 months, except during recessions [4][11] - The current market has not seen a pullback since April, and any potential pullback is expected to be contained within 4-5% [12][13]