We are committed to keeping our clients informed with insights into the market and economic trends that may affect their portfolio. Through regular updates, we provide a clear view of what we’re observing, what we’re tracking, and how we’re actively managing portfolios on their behalf.
Below is a brief overview from our Chief Investment Officer, Kieran Osborne, along with a link to our full Q3 Market Perspectives deck for deeper insights.
Market Update
Stocks have rebounded from earlier-year lows, supported by stronger-than-expected corporate earnings and resilient economic growth despite ongoing geopolitical uncertainty. Importantly, while equity markets have generated positive returns, earnings growth has outpaced stock price appreciation, resulting in a modest contraction in valuation multiples (P/E ratios).
While stocks have produced positive year-to-date returns, markets have experienced periods of heightened volatility, driven by concerns surrounding artificial intelligence (AI) disruption, elevated market concentration, stretched valuations, and, most recently, the conflict in the Middle East. Performance has also become increasingly dispersed, with the Magnificent 7 underperforming the broader market and meaningful differences emerging across investment styles, market capitalizations, and geographies. These dynamics reinforce the importance of maintaining a broadly diversified portfolio and a disciplined approach to portfolio rebalancing – both of which remain central to our long-term investment philosophy.
Economic Growth Remains Resilient
The U.S. economy continues to demonstrate resilience despite ongoing geopolitical uncertainty, supported by strong consumer spending and business investment. Recent economic data has broadly surprised to the upside, reflecting positive underlying momentum, with U.S. GDP currently expected to grow approximately 2.2% in 2026 – above its long-term trend rate. Continued AI adoption could also support further productivity gains and extend the current economic expansion.
Inflation and the Fed
At the same time, inflation is expected to remain above the Fed’s long-term 2% target through at least 2027. Given resilient economic growth, a well-balanced labor market, and still-elevated inflation, we believe the Fed may raise interest rates before year-end.
Investment Outlook and Opportunities
The current economic backdrop remains broadly supportive for financial markets. Historically, resilient economic growth has been positive for equities, although elevated valuations, a more hawkish Fed, persistent inflation, and continued stock market concentration may moderate returns moving forward. International and emerging market equities continue to offer attractive relative valuations compared to the U.S. market and may be well positioned to benefit from improving global economic conditions.
Within fixed income, current yields remain attractive relative to long-term averages, with many of our preferred bond funds yielding in the mid- to high-single digits. We also believe alternative investments may offer attractive risk-adjusted return potential while providing valuable diversification benefits within long-term portfolios.
For the full market update and investment outlook, please view our Market Perspectives deck.
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Mission Wealth is a Registered Investment Adviser. This commentary reflects the personal opinions, viewpoints, and analyses of the Mission Wealth employees providing such comments. It should not be regarded as a description of advisory services provided by Mission Wealth or performance returns of any Mission Wealth client. The views reflected in the commentary are subject to change at any time without notice. Nothing in this commentary constitutes investment advice, performance data, or any recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Mission Wealth manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.
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