A little volatility before year-end wouldn’t surprise us, but overall, we’re optimistic.

 

Despite headlines around tariffs and the government shutdown, markets aren’t exactly reacting in tandem. Strong earnings from Big Tech continue to drive momentum, moving the market higher.

 

At the same time, we’re focused on quality because even within the mega-cap tech space, some names are showing more growth potential than others.

 

Watch Brooke May, CFP®’s Bloomberg interview to learn more! ⬇️⬇️

 

Transcript:

Joining us now is Brooke May Evans May Wealth managing partner, and she writes, “remain optimistic heading into year-end. That said, some volatility would not be surprising before markets potentially rally into year-end.”

Brooke, was yesterday that volatility? We dropped, what? A little bit more than 1%. But we are back higher this morning.

Absolutely. In fact, I’m surprised to see the market relatively flat today.

We’ve had a parabolic move since April, and you would expect some cooling at some point. That said, looking out to next year, we think earnings could be up 14% in 2026, which you know with that becomes market performance. So, we think the market could end this year around 7,000. And next year the S&P go as high as potentially 7,700 by year end.

Are there areas, Brooke, where you’re rebalancing your clients’ portfolios, where you’re taking some of the wins and buying what you think might be undervalued now?

We still like big tech. And we’ve got quite a bit of big tech, so we’ll continue to hold those positions. However, right now, we think it’s an opportunity to add quality to the portfolio.

So, for those that are just getting invested, those that have been maybe sitting on the sidelines, we think you want that big tech exposure because you want the earnings. But in addition to that, valuations are high. And with high valuations comes greater risk. So, we wouldn’t be surprised if we do see a little bit of a sell-off. And in that case, you want quality names.

 

Julian Emanuel has been writing about the potential movers for a sell-off of Evercore ISI. And he says until the 19th of this month, when we get Nvidia earnings, the thing to be driving this market would be a government shutdown because of food insecurity, healthcare insecurity, air safety issues, military pay. He says it’s a consequence of the longest shutdown on record could be an S&P 500, which takes a beating.

Brooke, so far we haven’t seen really any market consequences of a government shutdown. Do you agree with Julian? Could that change?

The longer the shutdown goes on, the more risk there is. Right now, everything is hinging on the labor market, and the labor market has been the backbone of this economy in the last few years.

In fact, unemployment was below 4% for about two years. Since then, it’s ticked up to 4.3%. And once we see the government reopen, we could see unemployment tick a little bit higher. In the last few weeks, we have seen 82,000 layoffs announced by S&P 500 companies. And more recently, Indeed indicated that there are fewer job openings than there have been.

The one thing boding well, though, for the labor market is that we do have less immigration right now, in addition to demographic trends that aren’t favoring labor supply. So, with a reduced amount of supply, the fewer job openings shouldn’t be as detrimental as it could be.

Are you taking any credit risk right now, Brooke?

A modest amount.

Again, we’re optimistic on the economy, but I think you have to be selective, especially when it comes to private credit. Right now, the buzzword has been private credit. And those are companies oftentimes that aren’t publicly traded. Therefore, they don’t have necessarily as much stability. And a lot of the private credit funds out there are even using a ton of leverage sometimes too.

So, in this space, you need to know what you own and while you can take some credit risk, we don’t think it’s a good time to go into something like high-yield or leveraged private credit.

 

All right. Brooke, great to get some time with you. Really appreciate it. Brooke May there of Evans May Wealth. She was ranked by Forbes as one of the best-in-state wealth advisors* for years and years.

 

*Forbes Best-In-State Wealth Advisors (2018, 2019, 2022, 2023, 2024, 2025), created by SHOOK Research. Most recently presented April 2024 based on data gathered from 6/30/23-6/30/24. No fee was paid to be included in the ranking. Not indicative of advisor’s future performance. Your experience may vary.