Callan Family Office on Market Valuations, Earnings and AI Innovation

In this NYSE Live interview, Thomas Raymond, Founding Partner of Callan Family Office, discusses current market conditions, valuation trends, corporate earnings performance, and the role of innovation in shaping business growth.Raymond explains why he believes market valuations should be evaluated in the context of earnings performance rather than headlines alone. He discusses how investors can assess opportunities by focusing on business fundamentals and maintaining discipline amid periods of economic uncertainty and heightened market attention.The conversation examines recent earnings trends and the relationship between earnings growth and overall market valuations. Raymond highlights the importance of understanding how corporate performance can influence valuation metrics and investor perceptions over time.A significant portion of the interview focuses on innovation and entrepreneurship. Raymond discusses the impact of artificial intelligence on new business creation, describing how AI tools are helping entrepreneurs and startups develop products, services, and operating models in new ways. He explains why innovation extends beyond the largest technology companies and how emerging businesses are increasingly utilizing AI as part of their growth strategies.The discussion also explores broader themes surrounding opportunity identification, market fundamentals, and the importance of evaluating long-term business trends rather than short-term narratives.Throughout the interview, Raymond shares perspectives on earnings growth, valuation analysis, entrepreneurship, and the evolving role of artificial intelligence within today's business and innovation ecosystem.Disclaimer: Informational content only. NYSE does not endorse or recommend investments, strategies, companies, products, or services discussed.

Joining me now is Thomas Raymond, founding partner of Callen Family Office. Thomas, welcome.

So what are you watching in the market today?

Uh well, there's there's a lot to to reflect on, but we generally think that the markets today offer more value than what they did a year or two ago. And that might sound at odds with all the various fears that are about geopolitics to inflation.

Uh but there's there's a lot to like as a result of those fears and of the robust earnings cycle that's taking place in in corporate environment right now.

The S&P 500 is in striking distance of a new record. What is the playbook for investors looking for opportunities in this market?

It's it's being disciplined and it's starting it's anchoring to to valuations, not noise. So valuations right now, believe it or not, are lower today than what they started the year.

The S&P's trading at 19 times forward earnings uh right now. It's trading at 22 to start the year. And that's not because of uh necessarily fear or selling. That's because earnings are moving faster than prices.

We're seeing extraordinary earnings movements. We're seeing the S&P on a quarter-over- quarter basis up generating 52% earnings growth in the second quarter, following 29% earnings growth in the first quarter.

And it's the E is just moving faster than the P and amidst all the headlines and all the concerns that are out there, that is our one of our central anchor points right now.

And I understand you feel that while investors often focus on the biggest names in the market, most notably big tech, you recommend that they also shine a light on innovation. Can you break that down for us?

Sure. Uh, AI is is an it it's influential to the markets in a variety of ways, but it is an unlock to entrepreneurship. And it's breaking down barriers for new companies to to to form. To start, I mean just just one metric, year-over-year, 60% of businesses accounted uh cited AI as being helpful to their new business venture.

That's that's more than double the rate of just a year ago. Uh we're seeing a rise in entrepreneurs, innovators, 20% of individual um of startups um using AI have have uh you know, we've seen that that that's another number that's doubled year over year.

We're seeing AI just be this huge force in terms of entrepreneurism and that's also underscoring this point that the markets today have a lot more value than many might think.

All right, Thomas Raymond, founding partner of Callen Family Office. Thanks for joining us at the New York Stock Exchange.