InsightsThe Near-Term Risk Landscape
Julie highlights how forecasting earnings growth has become increasingly complex. While Wall Street remains laser-focused on quantitative models, KAR continues to prioritize qualitative business fundamentals. With valuation multiples pulling back from highs and a market still dominated by a handful of mega-cap names, Julie cautions investors: this is not the time to chase high-multiple stocks.
Tariffs, Inflation, and Spending Sentiment
Julie weighs in on the inflationary impact of tariffs and how pricing pressures are reaching a ceiling for consumers. On the corporate side, she points to softening confidence and declining capital expenditures, warning of a ripple effect on hiring and business investment. With no clear long- or short-term tariff agenda, Julie underscores the challenges companies face in issuing guidance—leading to a wider “cone of outcomes” and a drop in investor confidence.
Small Cap Vulnerability
Tariffs have disproportionately impacted small-cap companies. Julie notes that while small-cap equities can serve as a balanced portfolio component, passive exposure isn’t enough—stock selection and earnings visibility are key. Unfortunately, earnings growth remains elusive in this space.
What’s Next for Earnings?
Despite the uncertainty, Julie offers a grounded view: we are not headed back to zero. Recognizing a realistic range of earnings outcomes is vital as markets adjust to this new economic environment.
Watch the full panel discussion to hear Julie’s in-depth perspective on navigating today’s market with clarity and conviction.
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This information is being provided by Kayne Anderson Rudnick Investment Management, LLC (“KAR”) for illustrative purposes only. Information in this article is not intended by KAR to be interpreted as investment advice, a recommendation or solicitation to purchase securities, or a recommendation of a particular course of action and has not been updated since the date listed on the correspondence, and KAR does not undertake to update the information presented. This information is based on KAR’s opinions at the time of publication of this material and are subject to change based on market activity. There is no guarantee that any forecasts made will come to pass. KAR makes no warranty as to the accuracy or reliability of the information contained herein. Past performance is no guarantee of future results.
