Market Commentary

At this time (mid -2026) the stock market seems to be overpriced. That is, PE levels are at the high end of their historic range. This is due to excessive liquidity injected into the economic system from efforts by Trump reducing taxes, particularly for high earners and Cotporations. The cash has to be invested somewhere and the best investment in the past year was in the stock market. However, inflation is refusing to go back to the Fed’s goal. As economic activity is starting to waver because of Trump’s tariffs and because of the war with Iran. When this has occurred in the past the stock market has been vulnerable to a correction. Most economists are predicting a growing economy in the next year, with unemployment remaining low and production improving, in spite of this a correction is very feasible, due to Trump’s erratic behavior (tariffs on tariffs off, handling of Gaza, inability to end the War in the Ukraine, the war with Iran, Greenland, dismantling of government without legal authority, etc.).