(Download the full report HERE)

What Investors Can Monitor in a Late-Cycle Market

Strong earnings and improving market breadth remain supportive, but rates, credit spreads, and speculation deserve closer attention. 

Key Takeaways

• The rally remains fundamentally supported. Strong earnings growth and improving participation beyond mega-cap technology continue to underpin equities.
• Bond-market signals are mixed. The yield curve has normalized, but elevated long-term rates and widening AI-related credit spreads warrant attention.
• Coming in Part II: A closer look at earnings, market breadth, and speculative activity in equity markets help give a broader picture of where we are in the market cycle.

Background

It has been an exceptional run for stocks in recent years, and as the saying goes, all good things must end. But do they have to end now? Or anytime soon? The S&P 500 has more than doubled in value since a recent bottom in October of 2022. Going back to the COVID lows of March 2020, the index has more than tripled (Exhibit 1). Many of the reasons for outsized returns have been well-documented. The most common explanations revolve around the AI-trade, strong corporate earnings, and a resilient economy.

For the purposes of this discussion, it’s enough to know that markets have performed markedly well. With any strong rally comes trepidation over how long the run can last and predictions that the end is near. To be clear, no one can reliably time the market and calls for an imminent crash should be met with healthy amounts of skepticism. There is not a single metric that portends a bear market, but there are a few areas to examine that could lead an investor to believe that risk outweighs potential returns. The following pages will explore a few of those areas such as bond yields and spreads (Part I), equity valuations, market breadth, and measures of speculative mood (Part II) which, taken together, could help indicate where we are in the equity market cycle. 

Download the full report HERE where we discuss:

• Following the “Smart Money”
• Important Information

Sources

1. J.P. Morgan Guide to the Markets. Data as of June 30, 2026 
2. https://www.ustreasuryyieldcurve.com/
3. Federal Reserve Bank of St. Louis (FRED) 
4. Bloomberg

Important Disclosures

Investing is subject to a high degree of investment risk, including the possible loss of the entire amount of an investment. You should carefully read and review all information provided by the Atlanta Consulting Group Advisors, LLC (“ACG”), including ACG’s Form ADV, Part 2A Brochure and all supplements thereto, before making an investment.

The information contained herein reflects the opinions and projections of the ACG as of the date of publication, which are subject to change without notice at any time subsequent to the date of issue. All information provided is for informational purposes only and should not be deemed as investment advice or a recommendation to purchase or sell any specific security. While the information presented herein is believed to be reliable, no representation or warranty is made concerning the accuracy of any data presented. You should not treat these materials as advice in relation to legal, taxation, or investment matters.

Third-Party Websites

Third-party news, articles and links are being provided as a convenience and for informational purposes only. They do not constitute an endorsement or an approval by ACG of any of the products, services or opinions of the corporation or organization, or individual(s) involved. ACG bears no responsibility for the accuracy, legality, or content of the external site or for that of any subsequent links. Contact the external site owner for answers to questions regarding its content.