Group 1 - Morgan Stanley indicates that the worst is over, expecting the index to rise by 14% to 7800 points by 2026 [1] - Four reasons are provided for the growth cycle in the economy, corporate profits, and the stock market: (1) Corporate profit expectations have rebounded significantly from a low of -25% in April to around +15% currently [1] (2) Slowing wage growth allows for expansion in corporate profit margins [1] (3) Consumer demand is expected to accelerate, with companies showing stronger pricing power [1] (4) Following a rate cut by the Federal Reserve in December, two more rate cuts are anticipated by 2026 [1] Group 2 - Several market sectors are expected to perform well: (1) Non-essential consumer goods stocks, which have been rated "underweight" for four years, typically perform well during economic recoveries [3] (2) Small-cap stocks, which are cyclical and benefit more from declining interest rates [3] (3) Financial stocks, with potential improvements in commercial and industrial loan growth next year, making them attractive in terms of profit revisions, valuations, and holdings [3]