Inside Markets

Equities have likely entered a brief but bullish phase when good news/data is good and bad news/data is ignored.

It has been said that the market can only focus on one or two things at a time.

The ~12% rally from lows has erased the uncertainty discount with the SPX now trading at ~21x forward estimates.

The reopened corporate buyback window has been a major source of equity demand over the last three weeks.

The SPX has reached short-term overbought levels after a +12% rally from the April low.

The SPX managed to close above the 5396-5650 resistance zone on Friday.

Fundamental drivers of the recent rally, like resilient macro data and better-than-feared Q1 earnings, can be dismissed as lagging indicators.

Strong overnight results from META and MSFT push the Q1 blended earnings growth rate on the SPX to +12.3% from 7.2% at the end of the quarter.

The ‘soft’ survey data may be overstating the magnitude of an eventual tariff-induced slowdown.

The Fed is widely expected to leave rates unchanged next week with markets more interested in a potential dovish change to forward guidance.