Stocks Get Tech Lift Toward All-Time Highs

Summary

Francois Trahan, Chief Investment Strategist at BMO Capital Markets, discusses macro forces that could alter market consensus. He warns that inflation, particularly core inflation from energy prices, may become a problem for equity multiples in the fall. He also highlights the strong US economy driven by fiscal stimulus, capex, and rate cuts, with historic earnings growth signaling overheating.

• Consensus is bullish with stocks near all-time highs.
• Francois Trahan cautions that inflation could become a risk to market multiples.
• He fears commodity/energy price rises turning into core inflation.
• The US economy is being boosted by fiscal stimulus and capex from hyperscalers.
• Earnings growth in the S&P 500 is at historic levels, suggesting overheating.
• Labor force growth is zero due to demographics and immigration policy.
• The Fed faces a tough spot with constructive data but inflation risks.
• Nominal GDP could reach 5-6% in 2026.