Michael Arone

Emerging markets are poised for continued outperformance driven by expected Fed rate cuts, declining core inflation, faster growth relative to developed markets, and exposure to the AI buildout through South Korean companies. Investors should lean into EM growth for diversification.

Arone is uncomfortably bullish on the S&P 500, citing fiscal stimulus from the One Big Beautiful Bill, an expanding economy, monetary policy easing, double-digit earnings growth, a resilient consumer supported by tax refunds, the World Cup, and the 250th anniversary, plus deregulation and continued AI spending. He acknowledges high valuations, tight credit spreads, and complacent volatility shrink the margin for error, and that midterm election years tend to be more volatile, but he says the bull market ingredients remain strong, the 1998 historical analog and cautious sentiment give him greater conviction, and the segment references an 8000 year-end S&P target.