* High market weightings in large stocks suggest investors uncertain about the economy
* Chinese GDP growth in the second quarter increases significantly less than expected
* Analysts reduce China’s growth prospects after disappointing Q2 data
* Russia suspend grain agreement that allowed Ukraine to export to the world
*As the demographics of aging evolve, remodel the world economy
* Markets cautious optimism inflation will continue to fall
* Equity Strategists elevator S&P 500 Earnings Forecast
* US stocks (S&P 500) closed Friday at the weekly high since March 2022:
US stock market valuation is becoming increasingly “disconnected” from interest rates, advise Jurrien Timmer, global macro director at Fidelity. “Equity valuations had been anchored to interest rates until around the October low of last year (the blue and purple lines show estimates of the price-earnings (P/E) ratios of the ” fair value” for the S&P 500 based on regression models using interest rates),” he writes. “But in recent months, stocks have moved away from the interest rate peg and instead focused on hopes of a recovery in earnings. This means that for this bullish pivot to be justified, earnings will have to Currently, the consensus estimate is that S&P earnings will contract 9% in the second quarter, then bottom out in the third quarter of this year, before recovering in 2024. If this is correct, then the upside stocks and the rise in P/Es we have seen since last October may be warranted and may continue.
