Inside Markets — Tactically Bullish Fundamental Outlook

Recall, a tactically bullish fundamental outlook requires ongoing U.S. macro resilience, earnings growth, and favorable trade rhetoric. We covered reasons to be optimistic about Q2 earnings growth earlier this week, and yesterday we suggested that record consumer cash reserves are favorable for U.S. economic resilience. The trade piece is the hardest to forecast, but trade rhetoric from the White House suggests a willingness to extend the July 9 deadline for countries involved in good faith negotiations. The perception of reduced tariff risk and the Fed’s recent dovish tilt seem to be reestablishing a ‘floor’ (Trump Put/Fed Put) for equity markets. This is also coming at a time when the White House may be ready to pivot toward an equity-friendly deregulation agenda.