Capital Markets Outlook

Another all-time high for equity markets, another round of question marks. Many of the questions are familiar as a critical transition point looms. The US economy still seems on track toward normal, but a pendulum has swung: when it comes to the picture painted by macro data, many investors’ primary worry has shifted from “too strong” to “too weak.”

On top of a seemingly noisy macroeconomic picture, equity market returns have been decidedly top-heavy, driven by a handful of beneficiaries from the artificial intelligence (AI) wave. It’s hard to argue against the quality of those names, but they’ll need to back up lofty earnings expectations in the quarters ahead to continue their run. In the meantime, there’s life—and opportunity—beyond the kingpins.