S&P 500 Earnings Growth Overstated And Bifurcated

Bret Jensen Investing Group Leader Follow Summary S&P 500 profit growth is highly concentrated in energy and AI infrastructure, with most other sectors showing significantly weaker fundamentals. Valuations remain at extreme historical levels, raising caution amid tepid GDP growth, weak consumer demand, and potential AI bubble risks. Profit margins are at all-time highs but face significant mean reversion risk, especially as treasury yields rise and cost pressures mount. I maintain a defensive allocation within my portfolio: 5% cash, 20-25% short-term Treasuries, and the remainder in covered calls on select GARP stocks. Looking for a helping hand in the market? Members of The Biotech Forum get exclusive ideas and guidance to navigate any climate. Learn More » wildpixel/iStock via Getty Images The market pulled back a tad last week, but the indexes remain near all-time highs. GDP growth has been tepid over the last three quarters: Q4 (0.5%), Q1 (1.6%), and Q2 (1.5%). Energy prices have moved significantly higher since the conflict with Iran began. This article was written by Bret Jensen 58.57K Followers Follow Bret Jensen has been investing since the 1980s. He has been writing for Real Money Pro and Seeking Alpha since 2010. Bret specializes in high beta sectors with potentially large investor returns.Bret leads the investing group The Biotech Forum, in which he and his team offer a model portfolio with their favorite 12-20 high upside biotech stocks, live chat to discuss trade ideas, and weekly research and option trades. The group also provides market commentary, and a portfolio update every weekend. Learn More. Analyst’s Disclosure: I/we have a beneficial long position in the shares of PBF either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.