Summary
- The S&P 500 is up 11.2% YTD, on track for a fourth consecutive double-digit return year.
- Sustaining 2026’s rally requires persistently high P/E ratios, which have reached 41—well above the historical mean of 15.
- High P/Es typically precede market corrections, so continued investor optimism is crucial for further gains.
- Diversification beyond US stocks has improved risk-adjusted returns this year and remains advisable regardless of US market outlook.
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It’s basketball playoff season. The San Antonio Spurs play the New York Knicks in the 2026 NBA Basketball Finals that start June 3rd. The Spurs team is looking to return to basketball’s mountaintop for the sixth time, and
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