The US earnings engine is strong with 8% expected growth. Tailwinds include lower rates, lower taxes, weaker dollar (helps 40% overseas revenue), and stable oil prices. Not expecting much multiple expansion at 22x forward earnings.

Confirms potential for multiple contraction. Market has been driven by momentum and technicals, but fundamentals will be back in 2026. Need to look for quality at reasonable price, companies benefiting from productivity and margin management. Active management will be critical.

Still likes tech (overweight, 28% earnings growth), but wants diversification. Favorite cyclical sector is industrials (benefiting from capex initiatives). Finds value in healthcare and utilities (as AI play). Expects more market breadth, sees opportunity in mid-caps (30% discount to large caps). Would add some international for currency diversification as dollar loses risk-off appeal.

Bond vigilantes perked up, but sees value in bonds. Bonds are not sniffing out disinflation. Shelter inflation (3.5-4% in BLS) is close to flat in real-time measures. Inflation is not a significant issue for the Fed; it's more about the labor market. If inflation comes down, yields can move lower over the course of the year. Sees more value in intermediate part of the curve.