Inside Markets

: Large cap diversified banks always kick off earnings season, and the market reaction to good/bad results often sets the tone for the quarter.

In our opinion, the catalyst for the momentum factor unwind over the last two weeks is de-risking into CPI and earnings season and not a reaction to trade policy.

For now, trade/tariff concerns only look like the supply of pessimism that bull markets use as fuel.

This week’s equity rally started with narrow leadership that broadened out as incrementally dovish Fed messaging moved through markets.

Recall, a tactically bullish fundamental outlook requires ongoing U.S. macro resilience, earnings growth, and favorable trade rhetoric.

According to the Fed, U.S. consumer cash reserves reached a record $21T in Q1’25, up from $14.8T in Q4’19.

The near-term setup for equities is favorable if we can assume we’re past peak geopolitical risk (

Markets have a history of largely ignoring geopolitical risks as these events tend to be short-lived.

A more challenging near-term fund flow dynamic increases the probability of corrective price action.

The SPX shifted back to a low-volatility, bullish regime on May 12, which made February’s all-time high the near-term price objective.