Navigating the Uncertainty of a New Bull Market.

The S&P 500 has officially entered a bull market, but the rally is concentrated in a handful of stocks with enormous valuations compared to their underlying earnings. Changes in accruals are signaling that companies are potentially overstating reported earnings, and the top 10 holdings in the S&P 500 make up over 30% of the index, historically a red flag. Analysts had expected a mild recession in early 2023, followed by a robust recovery in earnings in late 2023 and 2024, but the Fed is likely to keep hiking interest rates to balance the economy, and corporate profits should continue to slowly fall.