dailyloe.com – Julian Emanuel, an Evercore ISI strategist, suggests that technology stocks may lead a market rally soon. He believes the market might be overvalued, yet specific sectors are trading at decade-low valuations. Emanuel’s base case indicates that crude prices could fall below US$90 per barrel, which would not impede a stock market rally.
Emanuel highlighted the S&P 500’s swift recovery, likening it to 1982 when the index surged by 69% from a June 30 low. He noted that the U.S. equity market transitioned from oversold to overbought more rapidly than during the tariff-related market trough in 2025. Unlike in 1982, when bond yields peaked, the future for inflation and bond yields remains uncertain today.
Price-to-earnings (PE) ratios currently sit around 25 times earnings, compared to eight times in 1982. However, similarities exist; oil prices peaked then and are now on a downward trend. Emanuel asserts that a WTI price below US$77 would support an S&P 500 above 9,000, as it currently hovers near 7,155.
Evercore remains optimistic about technology stocks regaining leadership in the market. The forward PE of the Nasdaq 100 compared to the S&P 500 is at levels last observed in 2016, despite stronger average profit growth. Emanuel humorously titled two charts in his recent report, “Under Powell, It’s Never ‘Too Late’ to Buy Stocks.”
His observations imply traditional market cycles may be outdated. Although he did not provide stock recommendations, he has previously highlighted companies showing consistent revenue and profit growth above consensus for the past eight quarters. These companies include Nvidia Corp. (NVDA-Q), Apple Inc. (AAPL-Q), Microsoft Corp. (MSFT-Q), Amphenol Corp. (APH-N), Qualcomm Inc. (QCOM-Q), Palo Alto Networks (PANW-Q), and Datadog (DDOG-Q).
