Even with stocks on track for their fourth consecutive double-digit return in 2026, bearish sentiment amongst individual investors reached its highest level in over a year, with more than half of survey respondents taking a negative outlook toward equities in September. With stocks continuing to climb the proverbial “wall of worry," our Technical Dial remains positive.

Despite a resilient labor market, strong corporate earnings, and a stronger than normal revision to Q2 GDP, the consumer remains as pessimistic as ever. With the Federal interest-to-GDP ratio on track to reaching an all-time high as the fiscal year comes to a close, borrowers likely see no path toward lower costs anytime soon. The nature of the current “muddle-through” economy leaves our Economic Dial in Neutral.

While bond yields surge to their highest levels this century, the dividend yield on the S&P 500 is moving the other way, threatening to cross below 1% for the first time in its history. Though increasingly few investors are looking to stocks for current income, this yield disparity only serves to highlight the current gulf in valuations between stocks and bonds. As such, our Valuation Dial remains Negative.