One question I've been hearing a lot lately is "Has the market gone up too far, too fast?".

It's a fair question. However, you have to remember that over the long run, stock prices follow earnings, not headlines.

The latest estimates call for S&P 500 earnings to grow by roughly 24% this year. This is a ridiculously oversized number. Outside of post-recession recoveries, we've rarely seen earnings growth this strong. Much of it is being driven by the enormous profit gains from large technology companies as AI investment continues to accelerate.

                 Source: Creative Planning, FactSet. July 14^th, 2026.

That doesn't mean the market won't have pullbacks. It will. But strong earnings give today's higher prices a much stronger foundation than many investors think.

It's also worth remembering that the stock market is not the economy, it's a market of businesses. While economic headlines often grab our attention, businesses are what drive stock prices. And right now, those businesses are making significantly more money than they were a year ago.

Additionally, it’s important to remember that bull markets usually don't end because stock prices are high. They end because earnings stop growing.

I have also included a piece from our CIBC Economics team entitled “The illusion of strength”.

As always, if you have any questions, please feel free to give us a call at any time.

Have a great weekend.

Milan