S&P 500 Valuations: Riding the Wave or Waiting for the Tide

SP 500 Valuations: Riding the Wave or Waiting for the Tide to Turn?

Were at multi-year valuation highs across key sectors, with Technology leading the pack. Earnings have held strong, but catalysts for further re-rating remain hard to identify.

The backdrop:
?? July jobs report showed cracks and subsequent revisions confirmed deterioration in the labor market.
?? This weakness has fueled expectations of Fed cuts, even as todays inflation print came in slightly above expectations.
?? The August 1 tariff deadline passed quietly, with USChina trade talks pushed out another 90 days.

Markets remain unfazed. Momentum intact. So the trillion-dollar question:
?? Ride the wave and stay fully invested?
?? Trim and lock in profits?
?? Buy the laggards while theyre cheap?
?? Sit on your hands and wait?

My take: Weak jobs, sticky core inflation, and rich valuations creates a market walking a tightrope. BUT, some would characterize this environment as a goldilocks period for stocks, with rates likely headed lower into year-end while earnings momentum stays strong.