From the US Market Desk What a Move

Franklin Templeton remains bullish on the US economy with a 2.5% GDP forecast, targeting an S&P 500 range of 7,000-7,400. They advocate for 'broadening' portfolios into small-caps and emerging markets to manage overextended tech valuations.

Key Takeaways

• 1.The firm maintains a constructive view on US equities with a year-end S&P 500 target of 7,000–7,400, but warns of short-term overbought conditions after a rapid rally.
• 2.Economic growth remains robust with a 2.5% GDP forecast for 2026, driven by AI infrastructure spending and a resilient consumer, though oil prices remain a risk.
• 3.A 'broadening' of equity performance is expected, favoring US small- and mid-caps, emerging markets, and Japanese equities over concentrated tech leadership.

Table of Contents

• Macro
• Equities
• Fixed income
• Sentiment
• Glossary of terms
• Indexes
• WHAT ARE THE RISKS?
• IMPORTANT LEGAL INFORMATION

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