Don’t fight the earnings cycle! Will the U.S. stock market break 8,000 points this year?

According to Fengxian Trading Desk, Jefferies issued a clear warning in its latest research report dated September 14: 'Don’t fight the earnings cycle.' Fueled by both the AI investment boom and stronger-than-expected corporate earnings growth, the S&P 500 Index is projected to surge to 8,000 points by the end of this year (2026) and further reach 9,000 points in 2027. The report acknowledges macro headwinds—including rising 10-year U.S. Treasury yields, persistent inflation, and the upcoming midterm elections—but maintains that corporate fundamentals will remain the core driver of returns. Jefferies’ central thesis is clear and compelling: resisting an earnings cycle in which growth significantly outpaces historical averages—by more than double—is inherently risky. Moreover, Jefferies believes AI-driven earnings expansion is broadening beyond the 'Magnificent Seven' into the wider market, thereby providing a more solid foundation for equities. Investors should focus on overweight sectors with robust earnings revisions and macro support—namely technology, financials, healthcare, and materials—and seize this rare 'super-cycle' of earnings growth amid concerns over valuation compression.

Mid-year reports release multiple positive signals; star biotech firms are poised for re-rating.

First, the company’s self-sustaining cash-generating capacity continues to strengthen, establishing a stable earnings foundation. Already-commercialized products—such as pralsetinib—are delivering steady revenue growth domestically through expanded access via China’s national health insurance scheme and consistent commercialization efforts by partners. In the first half of the year, revenue reached RMB 205.1 million—a more than 300% increase year-on-year—with mature products contributing RMB 183.2 million. Overseas, sugemalimab has received marketing authorization in the EU and the UK, and multiple license-out partnerships across various countries have been successfully concluded—further solidifying the company’s cash flow base. In other words, commercial cash generation can reliably support the company’s R&D expansion. This layer of certainty forms the foundational bedrock upon which all long-term narratives rest. Second, continued data updates and regulatory milestones for CS2009 are expected to consistently validate the pipeline’s value and unlock new market expectations. In the second half of this year, CS2009 will face multiple key catalysts. On one hand, additional clinical data readouts are forthcoming. The company expects to present updated data at ESMO—including monotherapy and combination therapy results for metastatic colorectal cancer (mCRC) in both first-line and later-line settings, as well as for non-small cell lung cancer (NSCLC) in similar settings. Combined with the positive interim results already disclosed in the mid-year report, these data will further substantiate the pipeline’s value—bolstering market expectations for business development (BD) collaborations and prompting a reassessment of the current undervaluation, leading to a more fundamentally justified valuation. On the other hand, leveraging exceptional clinical execution efficiency, the program is formally entering the critical registration-stage phase. The company plans to engage in discussions with the U.S. FDA and China’s CDE in Q4 regarding Phase III multinational randomized controlled trial (MRCT) protocols for CS2009 in combination with chemotherapy—both for first-line NSCLC and first-line mCRC—and anticipates initiating the first registration-enabling Phase III studies in the second half of the year. This milestone will serve as a core catalyst driving the re-rating of CS2009—and indeed, the entire company. The biopharma industry strictly adheres to stage-based valuation logic: distinct clinical stages correspond to markedly different valuation frameworks and probabilities of commercial success. A molecule in Phase II proof-of-concept is simply not valued on the same tier as a mature pipeline asset entering Phase III registration trials—making the initiation of Phase III studies a potential inflection point for significant valuation uplift. Beyond this, as the pace of the company’s ‘2.0’ innovation pipeline accelerates—with more ADC and other novel molecules receiving clinical trial approvals and advancing into development—the company’s long-term value will gain additional supporting pillars and growth momentum. Equally important is the supportive force emerging from the capital markets. Recent market performance over the past month indicates that the innovative drug sector is gradually shedding its prolonged bearish narrative. Market sentiment is shifting from extreme pessimism back toward rational equilibrium—thereby opening up room for valuation recovery. Furthermore, the inclusion of CStone Pharmaceuticals in the Hang Seng Composite Index represents another highly positive signal. According to the Hang Seng Indexes Company’s quarterly review results—published by HKEX on August 21 and covering the period ending June 30, 2026—CStone Pharmaceuticals has been added to the Hang Seng Composite Index constituent list, effective September 7, 2026. Inclusion in the Hang Seng Composite Index delivers positive impact across two dimensions. First, the index’s value effect. This benchmark index applies stringent screening criteria—including minimum thresholds for market capitalization, trading liquidity, and corporate governance—and serves as a key indicator of high-quality listed companies on the Hong Kong Stock Exchange.

Jefferies Sets USD 560 Target for Linde Stock

12 hours ago

Jefferies maintained a Buy rating for Linde with a USD 560 price target following strong Q2 2026 earnings of USD 9.289 billion and a USD 1.60 dividend declaration.

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