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The first full week of trading for 2026 is underway, and the vast majority of strategists expect U.S. stocks to have another good year.
Indeed, bulls may point to the stoic investor reaction to the weekend’s events in Venezuela as yet more evidence of the market’s fortitude.
However, Jeffrey Yale Rubin, Birinyi Associates’ president and chief investment officer, is not so upbeat that he can describe himself as a bull. The most optimistic tag he can adopt is ‘cautious calf,’ he says.
Explaining that bovine downgrade, he said although he wants to hold stocks, there are not many he actually wants to buy.
To be sure, Rubin’s fundamental analysis of the drivers supporting equities does not differ much from his peers.
“We want to own stocks because the economy is holding its own, earnings remain strong and inflation is contained,” says Rubin in a note published Sunday and shared with MarketWatch.
And he argues that aggregate stock market valuations are not a concern, with bears misguided in pointing to measurements such as the Cyclically-Adjusted Price Earnings (CAPE) ratio level as evidence of over-exuberance.
“Those that are worried about CAPE probably won’t remind you that they were concerned about it during the entirety of the 2009 bull market as well for the past three years,” Rubin says. “Perhaps they are right this time, but in our view any indicator that has flashed a warning for 15 years reminds us of the saying about a stopped clock being right twice a day.”
As long as earnings continue to grow as forecast for 2026, Rubin is not concerned about the valuation of the S&P 500 SPX and he rebuffs the comparison to the dot-com bubble. The current S&P 500 forward price to earnings multiple of 22 may be at the upper end of history, but it’s not extreme, he argues.
“In fact, 22x is where it was at the start of 2025 and most will not complain about last year’s performance,” he says.
But the problem for Rubin is that, as he noted in November, there is no longer the consistent buying that has been present for the past several months. “In other words, money flows have turned neutral…there is buying when the market rallies and selling when the market falls.”
Indeed, nine of 10 biggest stocks in the U.S. market have what Rubin terms neutral money flows, seeing neither stock accumulation or distribution (the latter means, basically, more selling), which hobbles indices.
Furthermore, 401 stocks have neutral money flows, according to Rubin. That’s 76% of the S&P 500 in terms of weighting that in Wall Street vernacular should be thought of as a hold, he says.
“The problem also is that the 28 stocks that classify as under accumulation represent only 6% of the S&P 500 on a market capitalization basis,” Rubin notes. See the table below.
And they are up against a 16% market weight of stocks under distribution. “Yes, they are a bigger weight than the under accumulation side of the ledger, but it is not a large enough or significant enough universe to warrant any thing less than our Cautious Calf stance,” writes Rubin.
Stocks that he considers to be in an uptrend number 104. And those that are also under accumulation number just four: Tesla TSLA, Eli Lilly LLY, Analog Devices ADI and Qualcomm QCOM. Rubin says Tesla stock, trading on 270 times 2026 forecast earnings, “is hard to justify.”
Which leaves just three. “Here is the problem, there are just not many stocks we want to buy at the outset of 2026,” Rubin says.
U.S. stock-indices SPX DJIA COMP are mostly higher at the opening bell as benchmark Treasury yields BX:TMUBMUSD10Y dip. The dollar index DXY is up, while oil prices CL.1 are advancing. Heightened geopolitical tensions are mainly being felt in precious metals, with gold GC00 and silver SI00 futures surging.
|
Key asset performance |
Last |
5d |
1m |
YTD |
1y |
|
S&P 500 |
6858.47 |
-0.68% |
0.17% |
0.19% |
14.78% |
|
Nasdaq Composite |
23,235.63 |
-1.60% |
-1.15% |
-0.03% |
20.51% |
|
10-year Treasury |
4.174 |
6.30 |
0.70 |
0.20 |
-46.20 |
|
Gold |
4445.1 |
2.18% |
5.34% |
2.61% |
67.94% |
|
Oil |
57.31 |
-0.90% |
-2.62% |
-0.17% |
-21.95% |
|
Data: MarketWatch. Treasury yields change expressed in basis points |
|||||
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Here were the most active stock-market tickers on MarketWatch as of 6 a.m. Eastern.
|
Ticker |
Security name |
|
NVDA |
Nvidia |
|
TSLA |
Tesla |
|
TSM |
Taiwan Semiconductor Manufacturing |
|
PLTR |
Palantir Technologies |
|
GME |
GameStop |
|
MU |
Micron Technology |
|
CVX |
Chevron |
|
AMD |
Advanced Micro Devices |
|
XOM |
Exxon Mobil |
|
AAPL |
Apple |
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