Expects good year for stocks driven by earnings. S&P rose 16% last year with 14% from earnings. Forecasts 12% earnings growth and 12% return for S&P in 2026.

Tech spending and earnings continue, accounting for big chunk of 12% growth. Largest stocks account for 30% of earnings. Expects broadening this year with economic acceleration, recommending small caps and consumer stocks.

Believes pro-cyclical trade is for real.

Would go long equal weight S&P in first half due to >3% GDP growth creating pro-cyclical environment. Full year GDP in mid-2% range.

Looking for two Fed cuts.

Short-term risk is market doubts cuts amid acceleration. In second half, as acceleration peaks and inflation declines, market regains confidence. Forecasts 10-year yield at 4.2% year-end, similar to current levels.

Biggest risk for equities is growth. Watching unemployment rate and jobless claims. If claims tick higher, would change equity market view.

Expects tick down in unemployment rate to 4.5%, which would be fine for stocks. Characterizes outlook as mid-cycle acceleration where corporates enjoy revenue acceleration without headwinds like higher input costs or Fed tightening.

High valuations are biggest pushback. P/E multiple of 22x, similar to 2021 highs and near 2000 record. But multiple today similar to start of 2025, which didn't stop good year last year.

Expects capex growth to continue. Consensus estimates $530-540 billion spending, ~40% increase from last year. Risk skewed to upside given cash flow and balance sheet strength.