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The Zacks Analyst Blog Highlights NVIDIA, Morgan Stanley and E.ON
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For Immediate Release
Chicago, IL – January 12, 2026 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: NVIDIA (NVDA - Free Report) , Morgan Stanley (MS - Free Report) and E.ON (EONGY - Free Report) .
Here are highlights from Friday’s Analyst Blog:
Broad EPS Strength Lifts: Zacks JAN 2026 Market Strategy
It does look like broad EPS strength is supporting high U.S. share valuations.
Regardless, let us look through both bull and bear views on 2026...
For 2026 bulls:
Annual EPS growth outlooks for the S&P500 (completed by Zacks on Dec. 19th, 2025) look robust:
· +11.0% across 2024
· +11.6% is coming in for 2025
· +12.3% is penciled in for 2026, and
· +15.1% shows up for 2027
Liquidity catalysts will be debated for 2026, from both global (U.S. and non-U.S.) monetary authorities. It is not guaranteed to work for stocks like it did in 2025.
Consider a dovish employment-mandate-focused FOMC, now at a 3.64% Fed Funds policy rate; an ECB in Europe at a 2.00% main refi policy rate; and a Mainland China People's Bank 1-year loan policy rate holding onto 3.0%.
Long-term U.S. Treasuries? The 10-year U.S. yield was a stubborn but mostly steady 4.14% on Jan. 8th, 2026.
Bond vigilantes could return, if the Supreme Court nullifies U.S. "emergency" tariffs.
"Big Beautiful Bill" fiscal effects? The first income tax benefits arrive during the April 2026 tax filing season. Medicare cuts happen after the Nov. 2026 election.
Next, an updated Dec. 2025 London Consensus outlook for the Fed Funds policy rate:
· 3.23% at the end of June 2026 (one 25 bps cut), and
· 3.13% at the end of December 2026 (two 25 bps cuts in total next year)
What about the Dec. 10th, 2025 "dot plots" offered up by the FOMC?
· The FOMC median 2026 Fed Fund rate is midway between 3.0% and 4.0%
· The DEC '25 regional bank outlooks are evenly spread from 3.0% to 4.0%
In sum, more Fed Funds rate cuts are no longer guaranteed in 2026.
Still, a majority of FOMC members stay pessimistic on labor markets entering 2026.
But the ultimate cause of that job market weakness is the rising unaffordability of U.S. good and services. The Fed has widely missed its inflation mandate for 5 years now. Stiff +25% surges in prices is commonly noted, across that time-period.
For 2025 bears:
· In Dec. 2025 Consensus Economics data, a 2.8% CPI in 2025 stays "sticky" at 2.8% in 2026
· Forecasts for +2.0% U.S. real GDP growth in 2025 are flat at +2.1% for 2026
Is that enough to support these rich U.S. share valuations?
On top of that...
A bitcoin price collapse creates a new downside risk for speculative traders. 3x to 4x market beta bitcoin is a leading indicator for U.S. equity trading on growth names.
Since an Oct. 10th, bitcoin has tumbled from a record high near $125K to trade around $85K. Bitcoin bear markets can run on for over a year, once they begin.
Market weight (aka "Mag 7" dependent) large cap U.S. share valuations are now creating 1999-era concentration risk.
Entering 2026, S&P500 traders' also fully price-in aggressive full-year 2026 and 2027 earnings estimates, across the board. Data pulled on Dec. 25th, 2025 from Zacks Research systems showed:
· The S&P500 LargeCap had a 26.3 P/E using '25, 23.3 for '26, and 20.2 on '27
· The S&P400 MidCap had a 19.6 P/E using '25, 17.0 for '26, and 14.9 on '27
· The S&P600 SmallCap had a 18.5 P/E using '25, 16.1 for '26 and 13.1 on '27
Much-loved large caps at 23.3 F12M P/E ratios for 2026 were undergoing a 2025 valuation expansion.
The last 2 months of 2025, that S&P500 large-cap valuation expansion stalled.
What about the mid-cap S&P400 index?
· The mid-cap S&P40 comes in at 17.0 in 2026.
· The mid cap's index value looks OK, if no major growth slowdown shows up in 2026.
The small-cap S&P600 index remains cheapest:
· The S&P600 has a 16.1 P/E ratio using model '26 earnings.
· That looks OK too. The same worry with mid-caps applies: A growth slowdown.
One fundamental policy reason for weaker P/E small and mid-cap forward valuations is a concentration of tariff costs, burdening small and mid-sized U.S. firms.
II. Zacks January 2026 Sector/Industry/Company Telescope
Dec. 31st, 2025 data showed several leaders: Info Tech remains dominant at Very Attractive. Info Tech EPS growth has AI data/cloud centers & mega-cap earnings.
Record prices on stocks and Fed policy easing keep Financials Attractive. Utilities stayed Attractive too. AI data center electricity use keeps it strong, as well.
There are many new Attractive sectors this month: Communications rose to Attractive. Telco Equipment ranked high, again. Consumer Discretionary rose to an Attractive rating. Industrials rose to Attractive. Energy sectors rose to Attractive. Energy-Alternates and Oil-Drillers led.
Health Care stayed at a Market rating. Medical-Products continues as a strong hand.
Materials looked stuck at an Unattractive rating.
Consumer Staples stayed at the back, at a Very Unattractive rating.
(1) Info Tech stayed at Very Attractive. Semis, Electronics and Misc. Tech led again.
Zacks #1 Rank (STRONG BUY): NVIDIA
(2) Financialsstayed at Attractive. Major Banks, Finance, Banks & Thrifts looked best.
Zacks #1 Rank (STRONG BUY): Morgan Stanley
(3) Utilities stayed Attractive. Utility-Gas Distribution was the best.
Zacks #1 Rank (STRONG BUY): E.ON
(4) Communications Services rose to Attractive. Telco Equip't was best, again.
(5) Industrials rose to Attractive. Metal Fabricating & Pollution Control, were its strongest industries, again.
(6) Energy rose to Attractive. Energy-Alternates and Drillers looked the best.
(7) Consumer Discretionary rose to Attractive. Consumer Electronics and Non-Food Retail/Wholesale looked best, again.
(8) Health Care stayed at Market Weight. Medical Products was its best, again.
(9) Materials rose to Unattractive. Steel and Metals-non-Ferrous stayed solid (Record high gold and silver prices!).
(10) Consumer Staples stayed Very Unattractive. But Soaps & Cosmetics and Agri-business looked great.
Free: Instant Access to Zacks' Market-Crushing Strategies
Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.
Today you can tap into those powerful strategies – and the high-potential stocks they uncover – free. No strings attached.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Highlights NVIDIA, Morgan Stanley and E.ON
For Immediate Release
Chicago, IL – January 12, 2026 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: NVIDIA (NVDA - Free Report) , Morgan Stanley (MS - Free Report) and E.ON (EONGY - Free Report) .
Here are highlights from Friday’s Analyst Blog:
Broad EPS Strength Lifts: Zacks JAN 2026 Market Strategy
The following is an excerpt from Zacks Chief Strategist John Blank's full Jan Market Strategy reportTo access the full PDF, click here.
I. U.S. Markets
It does look like broad EPS strength is supporting high U.S. share valuations.
Regardless, let us look through both bull and bear views on 2026...
For 2026 bulls:
Annual EPS growth outlooks for the S&P500 (completed by Zacks on Dec. 19th, 2025) look robust:
· +11.0% across 2024
· +11.6% is coming in for 2025
· +12.3% is penciled in for 2026, and
· +15.1% shows up for 2027
Liquidity catalysts will be debated for 2026, from both global (U.S. and non-U.S.) monetary authorities. It is not guaranteed to work for stocks like it did in 2025.
Consider a dovish employment-mandate-focused FOMC, now at a 3.64% Fed Funds policy rate; an ECB in Europe at a 2.00% main refi policy rate; and a Mainland China People's Bank 1-year loan policy rate holding onto 3.0%.
Long-term U.S. Treasuries? The 10-year U.S. yield was a stubborn but mostly steady 4.14% on Jan. 8th, 2026.
Bond vigilantes could return, if the Supreme Court nullifies U.S. "emergency" tariffs.
"Big Beautiful Bill" fiscal effects? The first income tax benefits arrive during the April 2026 tax filing season. Medicare cuts happen after the Nov. 2026 election.
Next, an updated Dec. 2025 London Consensus outlook for the Fed Funds policy rate:
· 3.23% at the end of June 2026 (one 25 bps cut), and
· 3.13% at the end of December 2026 (two 25 bps cuts in total next year)
What about the Dec. 10th, 2025 "dot plots" offered up by the FOMC?
· The FOMC median 2026 Fed Fund rate is midway between 3.0% and 4.0%
· The DEC '25 regional bank outlooks are evenly spread from 3.0% to 4.0%
In sum, more Fed Funds rate cuts are no longer guaranteed in 2026.
Still, a majority of FOMC members stay pessimistic on labor markets entering 2026.
But the ultimate cause of that job market weakness is the rising unaffordability of U.S. good and services. The Fed has widely missed its inflation mandate for 5 years now. Stiff +25% surges in prices is commonly noted, across that time-period.
For 2025 bears:
· In Dec. 2025 Consensus Economics data, a 2.8% CPI in 2025 stays "sticky" at 2.8% in 2026
· Forecasts for +2.0% U.S. real GDP growth in 2025 are flat at +2.1% for 2026
Is that enough to support these rich U.S. share valuations?
On top of that...
A bitcoin price collapse creates a new downside risk for speculative traders. 3x to 4x market beta bitcoin is a leading indicator for U.S. equity trading on growth names.
Since an Oct. 10th, bitcoin has tumbled from a record high near $125K to trade around $85K. Bitcoin bear markets can run on for over a year, once they begin.
Market weight (aka "Mag 7" dependent) large cap U.S. share valuations are now creating 1999-era concentration risk.
Entering 2026, S&P500 traders' also fully price-in aggressive full-year 2026 and 2027 earnings estimates, across the board. Data pulled on Dec. 25th, 2025 from Zacks Research systems showed:
· The S&P500 LargeCap had a 26.3 P/E using '25, 23.3 for '26, and 20.2 on '27
· The S&P400 MidCap had a 19.6 P/E using '25, 17.0 for '26, and 14.9 on '27
· The S&P600 SmallCap had a 18.5 P/E using '25, 16.1 for '26 and 13.1 on '27
Much-loved large caps at 23.3 F12M P/E ratios for 2026 were undergoing a 2025 valuation expansion.
The last 2 months of 2025, that S&P500 large-cap valuation expansion stalled.
What about the mid-cap S&P400 index?
· The mid-cap S&P40 comes in at 17.0 in 2026.
· The mid cap's index value looks OK, if no major growth slowdown shows up in 2026.
The small-cap S&P600 index remains cheapest:
· The S&P600 has a 16.1 P/E ratio using model '26 earnings.
· That looks OK too. The same worry with mid-caps applies: A growth slowdown.
One fundamental policy reason for weaker P/E small and mid-cap forward valuations is a concentration of tariff costs, burdening small and mid-sized U.S. firms.
II. Zacks January 2026 Sector/Industry/Company Telescope
Dec. 31st, 2025 data showed several leaders: Info Tech remains dominant at Very Attractive. Info Tech EPS growth has AI data/cloud centers & mega-cap earnings.
Record prices on stocks and Fed policy easing keep Financials Attractive. Utilities stayed Attractive too. AI data center electricity use keeps it strong, as well.
There are many new Attractive sectors this month: Communications rose to Attractive. Telco Equipment ranked high, again. Consumer Discretionary rose to an Attractive rating. Industrials rose to Attractive. Energy sectors rose to Attractive. Energy-Alternates and Oil-Drillers led.
Health Care stayed at a Market rating. Medical-Products continues as a strong hand.
Materials looked stuck at an Unattractive rating.
Consumer Staples stayed at the back, at a Very Unattractive rating.
(1) Info Tech stayed at Very Attractive. Semis, Electronics and Misc. Tech led again.
Zacks #1 Rank (STRONG BUY): NVIDIA
(2) Financialsstayed at Attractive. Major Banks, Finance, Banks & Thrifts looked best.
Zacks #1 Rank (STRONG BUY): Morgan Stanley
(3) Utilities stayed Attractive. Utility-Gas Distribution was the best.
Zacks #1 Rank (STRONG BUY): E.ON
(4) Communications Services rose to Attractive. Telco Equip't was best, again.
(5) Industrials rose to Attractive. Metal Fabricating & Pollution Control, were its strongest industries, again.
(6) Energy rose to Attractive. Energy-Alternates and Drillers looked the best.
(7) Consumer Discretionary rose to Attractive. Consumer Electronics and Non-Food Retail/Wholesale looked best, again.
(8) Health Care stayed at Market Weight. Medical Products was its best, again.
(9) Materials rose to Unattractive. Steel and Metals-non-Ferrous stayed solid (Record high gold and silver prices!).
(10) Consumer Staples stayed Very Unattractive. But Soaps & Cosmetics and Agri-business looked great.
Free: Instant Access to Zacks' Market-Crushing Strategies
Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.
Today you can tap into those powerful strategies – and the high-potential stocks they uncover – free. No strings attached.
Get all the details here >>
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Zacks Investment Research
800-767-3771 ext. 9339
support@zacks.com
https://www.zacks.com
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.