Dr. Bickel knows best!

The US has delivered more than 30% earnings growth YTD, with almost 15% expected for next year. This keeps US valuations below 21x PE, with margins already at record levels before the year began — and rising further. I do think this will eventually end in tears, but I do not see a bubble unless future earnings turn out to be a fata morgana. So yes, fall might bring stormy waters, but that looks more like a buying opportunity ⚓️ than the start of a longer‑lasting bear market.

The chip sector, measured by the SOX, saw stocks drop around 50% at the lows, but is now rising again — like a phoenix out of the ashes 🔥. Bulls often look less intelligent than bears, but this rally is not over. Europe is showing double‑digit earnings growth this year and next ➕.

Russell 2000: New Record Close — Momentum Still Intact The Russell 2000 closed at a new record on Friday 📈. Valuations now sit below pre–war‑correction levels, and the underlying earnings momentum — FEMO, as Dr. Ed calls it, or what I refer to as an earnings bubble — remains intact. The outlook has actually brightened, and momentum is still clearly present.

https://www.linkedin.com/posts/dr-andreas-a-bickel-cefa-59a03960_russell-2000-new-record-close-momentum-ugcPost-7494725784532717568-LzWT/?utm_source=share&utm_medium=member_desktop&rcm=ACoAAAzRswYB4WgsFEYrjEMwl5umWzasgF9USE8

Swiss GDP +1.5% adjusted for sporting events. Wow — so much for the negative impact of US tariffs on exports... There is no recession in sight, neither here nor in the US, and most likely not in the eurozone either.

AI boom in the US? Absolutely. Outperformance for a Swiss investor? Not so much. 😉 Over a longer period, however, the US has done much better. Therefore, a combination of the two is advisable. 🌍📈

SPI and EuroStoxx 50 are outperforming US equities when measured in CHF. 🤔 The CHF has recently depreciated against the euro, meaning that, over a very short period, a Euro investor does not necessarily need to hedge the FX risk. 💱 Over almost any longer period, however, this argument does not hold, as the euro has lost value against the CHF since its introduction. Even more astonishingly, the SPI and EuroStoxx 50 are now more or less at the same level when measured in CHF over the past 18 months — largely due to the strength of the Swiss franc. But here comes the surprising part: both indices are ahead of the S&P 500 and Nasdaq 100 when measured in CHF over the same 18-month period. 😲 The AI boom may be pushing US equities to new record highs 🤖🚀, but for a European investor, the picture looks very different. In CHF terms, over roughly 18 months, you would not have outperformed Europe by investing in the S&P 500 or Nasdaq 100 rather than the EuroStoxx 50 or SPI. 📊

Not too hot, but also not too cold. US CPI in line — and off we go… 🚀

Dr. Ed: I have been bullish, but not bullish enough. Earnings are growing 25% YoY. His year-end target is 8,400!

QED — you must not only think about whether the output is correct, but also double-check the numbers. LLMs are, in the end, language models. 🧠

Ask Bloomberg AI and your research is done. Use the output and let another AI tool visualize it. But don’t forget to think afterwards… More and more jobs for university leavers are disappearing. But when a lawyer or auditor does not have a younger generation who first needs to do the basic research work, who will be the next lawyer or auditor in five years? Turning to the stock market, I was bullish and positive about Q2 earnings, but the blowout has exceeded all my expectations. Even if I exclude the positive outlier, i.e. hyperscalers, the earnings growth rate is still 13%. Therefore, P/E ratios are hardly higher, although the S&P 500 has just reached a new record last week. FEMO (Fabulous Earnings Momentum) — or the earnings bubble, as I call it — is at its best. S&P 500 at 9,000 seems no dream any longer, and at that level, with actual earnings to support it, we would not even be at a bubble level. However, earnings cannot grow at this pace forever. But the outlook remains very solid.

Upgraded Consensus EPS Growth: Sell-side consensus and major institutional desks (such as Goldman Sachs and Rothschild & Co) have revised their underlying forecasts for European corporate earnings, anticipating roughly 10% to 12% aggregate EPS growth, rebounding sharply from flat performance metrics previously

📊 European stocks are riding a strong wave! 📈 Stoxx 600 Momentum: Continuing its winning streak with broad-based advances following a stellar week. 📈 Strong Technicals: Over 75% of Stoxx 600 members are now trading above their 200-day moving averages—hitting a two-year high. 📈 Economic Tailwinds: The Euro area's Citi Economic Surprise Index has reached a three-year high, contrasting with softer US data. 📈 Portfolio Update: We have closed our underweight over the last few months with little conviction, but so far, so good. 👉 Are you seeing this shift reflected in your portfolio strategy?

A short while ago, JPM moved from 7,600 to 7,800 and now to 8,000 — but we are almost at 7,800 already... We’ll stick to our assessment of more than 8,000 by year-end, i.e. more than 10% for the year. But I’m starting to get a little worried: Intel is offering $15bn of stock today, and we are seeing some signs of euphoria, at least in the US.

Key Market Takeaways 🟢 Cooling NFP: Softer employment data sparked rate-cut optimism and lifted the S&P 500 alongside broader asset price gains. 🟢 Scorecard Highlights: With 88% of S&P 500 companies reporting, 86% have posted positive EPS surprises and 76% have beaten revenue estimates. 🟢 Surging Growth: The blended year-over-year earnings growth rate stands at 50.4%—the highest since Q2 2021. 🟢 Upward Revisions: Broad-based momentum lifted all 11 sectors above their initial June 30 estimates (when growth was projected at 23.1%). 👉 That leaves us with a PE ratio of 20x even as the S&P 500 pushes into fresh record territory this week.

Semis are in a crash, just like silver was before this year. It’s probably voodoo, but it’s also scary how similar the development of this bubble has been so far.

https://www.linkedin.com/posts/dr-andreas-a-bickel-cefa-59a03960_bloomberg-headlines-picture-1-stocks-extend-ugcPost-7490760979404902400-LtgH/?utm_source=share&utm_medium=member_desktop&rcm=ACoAAAzRswYB4WgsFEYrjEMwl5umWzasgF9USE8

FEMO at work. 🚀 Dr. Ed sees 8,250 by year-end, but after yesterday, that’s starting to look rather conservative… Great earnings season so far. 📈 To all the bears: your time will come — but with a bit of luck, only next year. 😉🐻