Market Sentiment & Strategy - The market is near new highs, prompting a debate between defensive and offensive investment strategies [1] - Some clients questioned the need for defensive measures given the upward price momentum [2] - The consensus anticipates a soft patch in the market around August to October [5] - The combination of not seeing a bare case in June and a belief that earnings of the biggest 50 stocks won't be impacted much has people thinking the market is headed to highs [4] Earnings & Resilience - The largest 50 stocks in the S&P 500 contribute 50% of the index's gross profit dollars and have shown resilience to growth scares and higher inflation [6] - Smaller companies initially showed less concern about rising input costs, but median stock margins might be affected [7] - The focus is shifting towards companies with good but not excessive growth [8] Future Outlook & Investment Themes - AI-related trades, including semiconductors, utilities, and power, have performed well since the April 8th bottom [9] - 2026 is anticipated as a key year for realizing the benefits of current investments in company margins [9] - Investors are anticipating productivity gains from long-term trends, making them inclined to "buy the dip" [10][11] - The expectation is that trade tensions will not worsen significantly from current levels [12] - While some companies are experiencing negative impacts, it's not significant enough to impair S&P 500 earnings incrementally [14]
Equity valuations aren't discounting an earnings miss, says Trivariate's Adam Parker
CNBC Televisionยท2025-06-16 19:42