Slimmon Still Bullish on Tech Stocks

Market Sentiment and Earnings Guidance - The market rally is driven by sentiment, technical factors, and a fundamental case related to earnings [1] - Companies initially beat estimates significantly in the first quarter, but subsequently cut full-year guidance dramatically, creating uncertainty [2][3] - The market is rallying because earnings numbers may have been cut too much, and tariffs may not be as negative as initially anticipated [4] - Wall Street strategists have started to raise their targets for EPS and closing price targets, but only slightly [5] - The situation is reminiscent of the early stages of COVID-19, where companies withdrew guidance and Wall Street slashed earnings estimates, only to raise them later [7] - First quarter earnings beat estimates by approximately $4, but full-year guidance was reduced by $10, resulting in a $14 delta [7] Economic Outlook and Investment Strategy - A "little bull market" for stocks and a "little bear market" for bonds is anticipated, with stocks potentially benefiting from 1-2% economic growth despite tariffs and geopolitical unrest [8] - The estimate for next year's earnings is $300, but it may be too low because it doesn't fully reflect the potential margin enhancement from technologies like AI [9][10] - The fundamental story is turning out to be stronger than many predicted, suggesting a better bull market for earnings [11] Sector Preferences - World technology companies, particularly the "Mag Seven," are investing heavily in CapEx rollout, which is expected to pay off in the future [12][13] - There's a potential scenario where the rest of the world outperforms the S&P, and the S&P 493 outperforms the cap-weighted S&P this year, but the S&P cap rate could rebound next year as companies utilize new technologies [14]