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Despite the volatility we've seen in November, equity markets remain pretty well supported by earnings, liquidity, and seasonal trends. If you look at Q3 earnings season for the S&P 500 so far, 80% of constituents are beating expectations. Looking ahead to 2026, we're seeing about a 13% earnings growth rate projection.
As for dry powder there's about $7.5T in US money market assets, a record amount. Seasonally, Q4 is the best quarter to be in.
You know, what aren't investors concerned about? Lately we've been talking about a potential bubble in the AI space and technology. That's very premature. He was around in 1999-2000, and we don't have the same conditions as we did back then.
The concern really is have we gone too far, too fast? Markets have really taken off since April/May. There's also potential volatility with the midterm elections next year.
There's some softness in the Canadian economy, and that's expected for the next couple of quarters.
He believes that investors are really going to refocus on monetary policy, at least in the US. There's a strong case for another 25 bps cut by the US Federal Reserve in December. At this point, futures markets are predicting a 60-70% chance of a December cut.