Inside Markets — Revised Outlook

Last Monday’s upside gap through the 5750-5785 resistance zone invalidated the tactical bearish trend that developed after April 2. A corresponding pullback in volatility (VIX<20) now reinstates a low-vol bullish regime with a near-term upside objective in the 6125-6170 range. On the downside, we see ~5600 as the new key level of technical support.

With 90% of SPX companies having reported Q1 earnings, the blended (actual plus estimates on remaining 10%) Q1 earnings growth stands at +13.6% vs the +7.1% expected at the end of the quarter. ‘Uncertainty’ was the most common word used during earnings calls and is now partially reflected in H2’25 guidance. We know how this sounds – but if a slowdown doesn’t emerge, the unwinding of the H2 guidance cushion could potentially drive upside earnings revisions.