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Gunjan Banerji reports that Jeffries believes the market is underestimating U.S. equities' ability to absorb longer-term rates.
Despite the potential risk from higher yields and valuation pressure, Jeffries remains bullish on both large and small cap equities due to the strength and breadth of the current earnings cycle.
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Earlier this quarter, Gunjan Banerji reported that the S&P 500 Momentum Index lagged the S&P 500 by over 12 percentage points, marking its widest gap since 2001. Banerji also noted that economic forecasters have delayed expectations for an inflation peak to 2027. These developments add context to current debates about equity market resilience and valuation risks.