Based in Everett, Washington, Fortive provides professional and engineered products, software, and services for a variety of end markets. The company has approximately 10,000 employees. The shares are a component of the S&P 500.

Market volatility, mostly driven by ongoing earnings reports as well as continued worries over the good and bad implications of AI on individual stocks and overall sectors, is the order of the day. Most indices started red, turned green, and at midday have falling into the red zone yet again. The bull/bear tug of war continues.

Based in Everett, Washington, Fortive provides professional and engineered products, software, and services for a variety of end markets. The company has approximately 18,000 employees. The shares are a component of the S&P 500.

Nvidia and Walmart Beat, Stocks Fall Nvidia and Walmart both released strong earnings reports last week, but stocks sold off anyway on valuation concerns. The stock market's year-to-date performance has seen varying returns across different asset classes. Large-cap stocks, as measured by the S&P 500 index, have demonstrated strong growth, rising more than 13% so far in 2025, though they have pulled back from all-time highs in recent weeks. The small-cap sector, represented by the Russell 2000 index, has also posted positive results, up 7% for the year. In contrast, international stocks, such as those tracked by the iShares MSCI EAFE ETF, have seen significant gains, with a year-to-date return of over 22%. Emerging market stocks are also up 22%. Last week, the S&P 500 was off 1.95%, the Dow Jones Industrial Average pulled back 1.91%, and the Nasdaq Composite retreated 2.74% The third-quarter earnings season is just about over, with more than 90% of the S&P 500 companies having reported. The news has been good. A solid 83% of companies have beaten the EPS consensus, well ahead of the average 67%, while EPS have risen 16.9% year over year, almost double the 8.8% expected on October 1, accordingly to LSEG I/B/E/S. Notable contributions have come from the Information Technology (rising 29%), Financial (25%) and Industrials (23%) sectors. The only negative sector was Energy, with a 1.5% decline. Sales growth has come in at 'only' 8.1%, meaning bottom-line results have been helped by margin improvement and stock buybacks. The largest U.S. companies continue to raise the bar for profitability, making future comparisons more difficult. But efficiencies delivered via AI and a potential easing of some tariffs could keep earnings momentum alive and well, with consensus EPS growth currently at 13.7% for calendar year 2026 A few stragglers will report this week, including Zoom Communications and Zscaler on Monday; Dell Technologies, Autodesk, Kohl's, Urban Outfitters and Best Buy on Tuesday; and Deere & Co. and Li Auto on Wednesday. Economic data is starting to flow again, as the non-farm payrolls report for September was released last week and indicated that a better-than-expected 119,000 new jobs had been created. Our outlook is for healthy GDP growth with a few twinges. Non-government data, company earnings reports, market 'internals,' and our own research support our diagnosis even with the government bureaus having been shuttered. Our analysis suggests that the underlying rate of growth is approximately 2.2% in the second half of 2025. Third-quarter GDP looks stronger than the baseline, and 4Q may be slightly weaker because of the shutdown and comparisons against very strong investments in artificial intelligence. We expect 1.7% growth in 4Q25 and 1.6% growth in 1H26, before an acceleration to 2.3% growth in 4Q26. We expect full-year growth of 1.9% in both 2025 and 2026. Looking at leading and lagging sectors so far in 2025, Information Technology (+25%) and Communication Services (+23%) are the top performers, followed by Utilities (+17%), and Industrials (+15%). These are the market outperformers. Resurgent Healthcare (+10%), as well as Energy (+7%) and Financials (+8%) are not far behind. Defensive sectors like Materials (+4%), Real Estate (+1%), Consumer Discretionary (+3%), and Consumer Staples (+1%) are at the bottom of the performance list. Our recommended over-weight sectors are Information Technology, Communication Services, Financial, and Utilities.