A. MARKET OUTLOOK Our market outlook remained consistent throughout the reporting period and was further reinforced over the course of the month. We continue to identify four primary risks that could contribute to a re-acceleration of inflation. These include expansionary fiscal policy such as tax cuts, the Federal Reserve’s projected rate cut path, ongoing oil supply shocks driven by geopolitical tensions, and the impact of tariffs. Among these factors, oil shocks have em

MARKET OVERVIEW             February 2026 was a month defined by escalating geopolitical friction, significant shifts in U.S trade policy, and a cooling but resilient domestic economy. The period began with a major legal rebuke to the White House’s tariff strategy when the Supreme Court stuck down duties imposed under the International Emergency Economic Powers Act (IEEPA), invalidating a core component of the administration’s 2025 trade agenda. The administration quickly mov

MARKET OVERVIEW Market sentiment over the month was shaped by a persistent tension between slowing growth and residual inflation, compounded by political uncertainty and rapid structural change in key industries. Investors moved back and forth between risk-on and risk-off positioning as incoming data, often delayed or partial, undermined confidence in traditional macro signals. The prolonged U.S. government shutdown became a material factor in its own right, disrupting trans

November Bottom Up IERP The Implied Equity Risk Premium (“IERP”) is commonly estimated using methodologies similar to the internal rate of return in project finance or the yield to maturity of a fixed income instrument. At the aggregate market level, the IERP is understood as a market capitalization weighted average of the IERPs of the individual securities that comprise the index. This framework permits the cross validation of top down IERP estimates by reference to bottom

MARKET OVERVIEW October opened under intense macroeconomic uncertainty as the U.S. federal government entered a shutdown at 12:01 a.m. on October 1. With roughly 800,000 government workers furloughed, the shutdown immediately threatened consumer spending and federal services, and it also delayed critical economic releases including monthly jobs and inflation data, reducing market visibility and policymaker clarity. Historically, prolonged shutdowns drag GDP, and early analys

October Bottom Up IERP The Implied Equity Risk Premium (“IERP”) is commonly estimated using methodologies similar to the internal rate...

Market Overview September closed with a complex mix of economic signals, policy shifts, and corporate developments. Labor market weakened more than expected, with nonfarm payrolls adding just 22,000 jobs in August and unemployment rising to 4.3%. Later revisions revealed the U.S had created nearly one million fewer jobs over the past year than initially reported. Worker confidence in finding new employment dropped to its lowest since 2013, and a growing trend of “job hugging

Summary: Implied Equity Risk Premium (IERP):  As of August 31, 2025, the IERP is estimated at 4.10%, below the historical average (5.36%) and recessionary threshold (6.16%), signaling stretched valuations and lower compensation for equity risk. Market Valuation & Buybacks:  S&P 500 market cap rose to $54.8T with upward earnings revisions, but growth and payout ratios declined. Rising buybacks alongside falling dividends highlight tax and flexibility advantages but pose risks

Summary: Valuation Revision: S&P 500 valuation increased due to a $50 billion rise in stock buybacks and a mixed earnings outlook—2025 earnings lowered slightly, while 2026 earnings were revised upward. Equity Risk Premium Sensitivity : Valuations were analyzed using a range of equity risk premium scenarios centered around the 5.36% long-term average, highlighting how shifts in risk premium assumptions impact the S&P 500’s fair value. Complementary Valuation Methods: Price-

In this brief update, we share our latest estimate of market valuation, guided by our internal models, along with an update on the equity risk premium, using the implied premium derived from the S&P 500. We begin with a model-based view, explaining how the key inputs have changed and what those changes mean for our valuation outlook. We then turn to developments in the implied equity risk premium and consider what recent movements may suggest. We also provide our estimate of

Baoro Research KEY SUMMARY: l . Elevated Valuation: Both our IERP and P/CF models suggests the S&P500 is significantly overvalued at current levels (~5,280), with fair value estimates pointing toward the 4,000 – 4,300 range – implying a potential downside of 18 – 25%. lI.   Deteriorating Macro Conditions: Rising inflation expectations, weak consumer confidence, increasing jobless claims, and renewed tariff pressure suggests that the bear steepening of the yield curve is being

March 2025 Market Overview U.S & Canada March presented a turbulent landscape for global markets, shaped by growing economic...

Dear Investors, Happy April, and thank you for visiting. We’re pleased to announce the launch of our Newsletter & Updates page , a new...

Date: January 11, 2025 Overview Since the market turbulence experienced from late summer 2021 through Q4 of fiscal year 2022, U.S...