Happy Friday, investors. Late Thursday, President Trump announced a new slate of tariffs for goods manufactured outside the US:

This is a developing story. We will have more to report in the coming days.

Wall Street enters its strongest quarter of the year with markets at their most expensive levels on record. 

That sets up a paradox for investors. Valuations are stretched like never before but both seasonal and structural tailwinds suggest the rally isn’t slowing anytime soon. 

“The S&P 500 trades like it’s the new risk-free rate,” Bank of America strategist Savita Subramanian wrote in a note this week. 

She highlighted that the index is trading rich across 19 of 20 metrics, four of which just hit all-time highs.

The Shiller P/E sits at more than double its long-term average, for example, while total market value is 1.8x GDP. 

Typically, that would imply muted returns over the next several months.

Yet the apparent frothiness may be less dangerous than it looks. 

Savita argues that today’s stocks and businesses are far more resilient than those of the past: 

This is not the stock market of the dot-com era, in other words. 

Multiples are indeed historically rich, but they’re attached to companies with more predictable earnings and lower risk profiles. 

“Perhaps we should anchor to today's multiples as the new normal rather than expecting mean reversion to a bygone era,” Savita said.

Now, it’s true that the three benchmark US stock indexes have now dropped for three consecutive trading days for their longest combined losing streak in six months.

Still, the fourth quarter has been the market’s most consistent winning season for nearly a century. 

Dating back to 1928, the S&P 500 has notched a positive fourth quarter 74% of the time, according to BofA, averaging a 2.9% gain.

The Nasdaq 100 performs even better, up more than 6% on average, while the small-cap Russell 2000 posts about 4.5%. 

And the historical and seasonal data above doesn’t even take into account the tailwind of expectations for multiple Fed rate cuts. 

“With major regions in easy fiscal mode, and with the Fed cutting against a backdrop of broadening and accelerating profits, it's not hard to argue for a boom in EPS and GDP growth,” Savita said. 

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📊 Fresh inflation data comes due this morning. The government is set to release its personal consumption expenditures data for August. Economists see core PCE rising 2.9% year-over-year, mirroring the July print. (Morningstar)

📈 The US economy grew at 3.8% in the second quarter. That’s a half-point better than the prior estimate, and another data point to push back on recession fears. It’s the fastest growth rate in almost two years. (CNN Business)

📱 President Trump approved the TikTok deal via executive order. China must still approve the terms of the deal, and a joint-venture company will oversee TikTok’s US business. VP Vance said the company is valued at $14 billion. (CNBC)

📉 Weekly jobless claims came in lower than expected. The weekly figure hit 218,000 seasonally adjusted, down 14,000 from the week before and below the forecast for 235,000. (CNBC)

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📰 I’m Phil Rosen, co-founder and editor-in-chief of Opening Bell Daily. I’ve published books, lived on three continents, and won awards for my journalism, which has appeared in Business Insider, Fortune, Yahoo Finance, Bloomberg and Inc. Magazine.

I write our flagship newsletter to prepare you for each trading day — unpacking markets, economic data and Wall Street with analysis you won’t find anywhere else.

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