Two tailwinds
Easier financial conditions and the strongest earnings beats in four years are giving confidence to the bulls. With yields plunging and S&P 500 earnings revisions rising, the market’s optimism is anchored in these two tailwinds.
Lowest since April
10-Year Treasury Yield plunges to lowest level since April.
Source: @barchart
Biggest drop in over a year
The 2-Year Treasury yield just made its biggest drop since 2024.
Source: @_Investinq
Loosening
Financial conditions are loosening aggressively – trying to take out a 3-year low.
Source: Goldman
Broadest beats in 4 years
At the same time, corporate America is delivering strong number vs. expectations. US revenue and earnings seeing broadest beats in 4 years.
Source: Morgan Stanley
Revision breadth bull
S&P 500 EPS revision breadth has risen sharply.
Source: FactSet
Q3 numbers
Earnings estimates for Q3 are holding up pretty well.
Source: Factset
Buy the dip in Quality
This might be a good time to buy quality stocks. The drawdown in quality looks advanced relative to post-covid trends.
