![\"\"](\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2025\/09\/iJfd3-the-s-amp-p-500-is-expensive-versus-history-across-nearly-every-metric-nbsp-.png\")
<\/p>\nHappy Friday, investors. Late Thursday, President Trump announced a new slate of tariffs for goods manufactured outside the US: <\/p>\n
100% tariffs on pharmaceuticals <\/p>\n
50% tariff on select bathroom and kitchen furniture<\/p>\n
30% tariff on upholstered furniture<\/p>\n
25% tariff on heavy trucks<\/p>\n
This is a developing story. We will have more to report in the coming days. <\/p>\n
Wall Street enters its strongest quarter of the year with markets at their most expensive levels on record.\u00a0<\/p>\n
That sets up a paradox for investors. Valuations are stretched like never before but both seasonal and structural tailwinds suggest the rally isn\u2019t slowing anytime soon.\u00a0<\/p>\n
\u201cThe S&P 500 trades like it\u2019s the new risk-free rate,\u201d Bank of America strategist Savita Subramanian wrote in a note this week.\u00a0<\/p>\n
She highlighted that the index is trading rich across 19 of 20 metrics, four of which just hit all-time highs. <\/p>\n
The Shiller P\/E sits at more than double its long-term average, for example, while total market value is 1.8x GDP.\u00a0<\/p>\n
<\/p>\n
Typically, that would imply muted returns over the next several months. <\/p>\n
Yet the apparent frothiness may be less dangerous than it looks.\u00a0<\/p>\n
Savita argues that today\u2019s stocks and businesses are far more resilient than those of the past:\u00a0<\/p>\n
Companies are more asset-light and labor-light<\/p>\n
Balance sheets carry less leverage<\/p>\n
Most debt is long-term and fixed<\/p>\n
Over 60% of the S&P 500 is rated \u201chigh quality\u201d compared to less than 50% two decades ago<\/p>\n
This is not the stock market of the dot-com era, in other words.\u00a0<\/p>\n
![\"\"](\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2025\/09\/Screenshot_2025-09-26_at_10.04.57_AM.png\")
<\/p>\n
Multiples are indeed historically rich, but they\u2019re attached to companies with more predictable earnings and lower risk profiles.\u00a0<\/p>\n
\u201cPerhaps we should anchor to today’s multiples as the new normal rather than expecting mean reversion to a bygone era,\u201d Savita said.<\/p>\n
![\"\"](\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2025\/09\/Screenshot_2025-09-26_at_10.04.42_AM.png\")
<\/p>\n
Now, it\u2019s true that the three benchmark US stock indexes have now dropped for three consecutive trading days for their longest combined losing streak in six months. <\/p>\n
Still, the fourth quarter has been the market\u2019s most consistent winning season for nearly a century.\u00a0<\/p>\n
Dating back to 1928, the S&P 500 has notched a positive fourth quarter 74% of the time, according to BofA, averaging a 2.9% gain.<\/p>\n
The Nasdaq 100 performs even better, up more than 6% on average, while the small-cap Russell 2000 posts about 4.5%.\u00a0<\/p>\n
And the historical and seasonal data above doesn\u2019t even take into account the tailwind of expectations for multiple Fed rate cuts.\u00a0<\/p>\n
\u201cWith major regions in easy fiscal mode, and with the Fed cutting against a backdrop of broadening and accelerating profits, it’s not hard to argue for a boom in EPS and GDP growth,\u201d Savita said.\u00a0<\/p>\n
Staying on top of markets that hit a new all-time high seemingly every week, a never-ending news cycle and volatility that\u2019s frankly…volatile is a lot of work. <\/p>\n No matter what the market is doing, tastytrade<\/a> has the tools you need to stay up to date and trade your way through it. <\/p>\n \ud83d\udcca Fresh inflation data comes due this morning. The government is set to release its personal consumption expenditures data for August. Economists see core PCE rising 2.9% year-over-year, mirroring the July print. (Morningstar<\/a>)<\/p>\n \ud83d\udcc8 The US economy grew at 3.8% in the second quarter. That\u2019s a half-point better than the prior estimate, and another data point to push back on recession fears. It\u2019s the fastest growth rate in almost two years. (CNN Business<\/a>)<\/p>\n \ud83d\udcf1 President Trump approved the TikTok deal via executive order. China must still approve the terms of the deal, and a joint-venture company will oversee TikTok\u2019s US business. VP Vance said the company is valued at $14 billion. (CNBC<\/a>)<\/p>\n \ud83d\udcc9 Weekly jobless claims came in lower than expected. The weekly figure hit 218,000 seasonally adjusted, down 14,000 from the week before and below the forecast for 235,000. (CNBC<\/a>)<\/p>\n Thank you for reading. Join our Best Ideas Club to access our members-only stock tracker. <\/p>\n Carmax stock fell 20% after weaker earnings, stock downgrade from Truist Securities (Investing.com<\/a>)<\/p>\n Amazon agreed to a $2.5 billion settlement with the FTC in a case that alleged it tricked customers into signing up for Prime (Barron\u2019s<\/a>)<\/p>\n Republicans and Democrats continue to battle over a government shutdown (WSJ<\/a>)<\/p>\n The US is going all-in to prop up Argentina\u2019s economy (Barron\u2019s<\/a>)<\/p>\n Data center power demand is starting to surge across the US (FactSet<\/a>)<\/p>\n![\"\"](\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2025\/09\/TT1801_S05b_1000x500_01.jpg\")
<\/a><\/p>\n![\"\"](\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2025\/09\/newplot__90_.png\")
<\/p>\n