Greg Davis visited Fortune this month dressed like a Wall Street titan—and bearing a very un-Wall-Street message about a tepid future for U.S. stocks.
On July 11, Davis––the president and chief investment officer of Vanguard Group––came to our offices in Manhattan’s Financial District for a chat with this reporter. Though Davis works from Vanguard’s mother ship (its buildings are all named for British vessels from the Napoleonic wars) in the quiet Philadelphia suburb of Malvern, he arrived attired in a tailored gray suit and purple silk tie combo that would have fit right in with the most formal of the investment banking cadre and portfolio managers headquartered nearby.
Yet Davis’s message couldn’t have been more contrary to the fashionable view among the neighborhood’s rosy prognosticators.
The 25-year Vanguard veteran’s outlook contradicts the prevailing position advanced by the big banks, research firms, and TV pundits that despite serial years of big gains, U.S. stocks remain a great buy. That bull case rests mainly on optimism that the Big Beautiful Bill’s deregulatory agenda and tax cuts will spur the economy, and that the AI revolution promises a new world of efficiencies that will shift earnings to super-fast track going forward. The powerful momentum that has driven the Nasdaq and S&P 500 to all time highs this week bolster their argument for more to come.
