Matthew Weir

Yeah, absolutely.

We look, though, at the structure of the national economy and we look at CapEx as a share of GDP.

What's interesting to note is that capital formation as a share of GDP is the same level as a percent as it was in 2018.

So we've seen a tremendous amount of investment, especially in the tech industry.

From a national standpoint, it doesn't feel in balance.

Now, rightly, investors are starting to wonder what is the return going to be on all of the investment going into AI?

We think that there has been a lot of excitement, perhaps over exuberance in places.

But clearly, as you mentioned, that there is a lot of demand still.

And that's something that we think can continue to go.

Yeah.

Well, I think going back to what you just said, the demand for AI CapEx is still very, very high.

When we think about what determines equity returns, whether you're looking at history since World War II or even the last year, for the S&P 500, 80% to 90% of the return comes from earnings.

And so the outlook for prices is really predicated on do you expect earnings to grow?

And we do think so.

We think earnings growth for the S&P 500 will be about 10% this year.

That is largely predicated on an economy that we think will be growing above trend.

We're expecting 2.4% real GDP growth versus trend growth for the U.S.

of about 2%.

That, we think, will generate that 10% earnings growth.

We think, though, in our base case that the total return, though, for S&P 500 will be about 7%, which means not all of that earnings growth makes its way into the total return, primarily because we think multiples will come down a little bit from their currently elevated levels.