What's Next For Markets Post-Inflation Shock “Goldilocks”?
Oct 5, 2025
Dive into the current economic landscape that's shaping up like a post-inflation-shock "Goldilocks" environment. Discover how market breadth is starting to heal and why this shift is crucial. Explore which sectors could take the lead, especially small caps and cyclicals. The conversation also tackles whether active management strategies might outpace passive ones in this evolving market. Get insights on resilience and the surprising strength of the economy post-pandemic!
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Breadth Over Multiple Expansion
- Michael Kantrowitz observes markets shifting from narrow, growth-led gains to broader earnings-driven participation.
- He sees rising breadth as the key driver rather than further large-magnitude multiple expansion.
Earnings Breadth Is Finally Improving
- Michael notes the recent improvement in small-cap earnings breadth as the broadest since 2021.
- He believes this earnings healing can finally be sustainable rather than transient.
K-Shape Reconverging, Not Reversed
- Michael frames the shift as a reconvergence of a K-shaped economy as lagging segments begin to heal.
- He still expects secular tech leadership to remain strong even as breadth widens.