Matt Miskin on ‘Earnings Nirvana’ and What Comes Next

The U.S. stock market is in a state of 'earnings nirvana' after a shockingly strong quarter where 85% of companies beat earnings expectations, driven by a historic semiconductor supercycle fueled by AI investment and massive fiscal stimulus. Matt Miskin of John Hancock Investment Management warns this momentum is unsustainable, calling it a 'sugar rush' fueled by $600 billion in fiscal stimulus, accelerated capital spending, and tariff refunds. While tech continues to lead with booming growth, he expects earnings to decelerate in the back half of the year, especially as inflationary pressures from higher gas prices and input costs mount. The Fed faces a tightrope walk—balancing inflation concerns with labor market softness—leading Miskin to predict just one rate cut by year-end. Despite market euphoria, he urges investors to prioritize income and quality, highlighting 5% yields on high-grade bonds and defensive sectors like utilities and infrastructure as smart hedges against inevitable mean reversion. The global picture remains uneven, with Europe struggling and Asia’s gains isolated to tech-heavy markets, making the U.S. the standout economy—though not immune to geopolitical shocks or mid-term election volatility.