Markets at Records, But Gains May Slow with Rates, Taxes and Uncertainty Ahead
• Stock markets have boomed recently, with indices like the S&P 500 and Nikkei 225 hitting record highs • Much of the profit growth over the past 30 years has been an artifact of falling interest rates and tax rates • Valuations are at historically high levels and would need to rise further to match recent returns • Earnings growth faces challenges from rising rates/taxes and economic uncertainty • AI is seen as a potential savior for driving transformative productivity gains, but that is a heavy burden for an emerging technology