Anatomy Of The Bull Market (Will DeepSeek Sink It?)
The current bull market has been driven mostly by valuation expansion; now valuation is historically high. We expect earnings growth to perpetuate the bull market this year; any more valuation expansion could leave the market vulnerable to a meltdown. Our year-end target for the S&P 500 is 7000, based on a solid rise in earnings with no further valuation expansion. … Much of our optimism rests on the Magnificent-7 remaining magnificent. If they don’t disappoint investors, the S&P 500 likely won’t either given their hefty collective share of the index’s market capitalization. … However, a competitive threat to their magnificence has emerged from China: DeepSeek, with reportedly cheaper AI. Could DeepSeek deep-six the Mag-7?
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