Strong Earnings Continue to Support Expensive Equity Markets

Equity Lens – July 2026 argues that global equities remain richly valued, but unusually strong earnings growth expectations continue to support markets despite growing stagflation and geopolitical risks. 

• U.S. small caps, emerging markets and Japan have been the strongest-performing equity markets in 2026, while leadership within U.S. equities has broadened beyond the Magnificent Seven. 
• Although valuations across most major markets are near the upper end of their 20-year historical ranges, exceptionally strong earnings growth—particularly in emerging markets and the United States—continues to underpin investor sentiment. 
• For investors concerned about stagflation, the report favours quality and value stocks, defensive sectors and energy equities, while recommending greater caution toward consumer discretionary shares, real estate and parts of the technology sector. 

Read the full report for deeper insights into global equity valuations, earnings trends and portfolio positioning.