Risk in equity markets is that there is no risk, says John Hancock's Emily Roland

Market Overview - The S&P 500 and NASDAQ are at record highs, presenting a complex backdrop for the upcoming earning season [1] - Market sentiment has shifted from deeply negative to positive, with potential for further gains [2][3] - The S&P 500 is trading at approximately 223 times forward earnings, near a 10-year high, while yield bond spreads are at 268 basis points, close to a 10-year tight [4] Economic Factors - The economy is in decent shape, supported by positive labor market data and low corporate defaults [3] - Disinflation, particularly from the housing market, is a significant factor [9] - Shelter represents about 23% of CPI readings, making it a crucial element [10] Housing Market Dynamics - The housing market is experiencing significant changes, with the largest supply since 2020 and slowing demand due to unaffordability and insurance costs [10] - Real-time measures of housing may lead to the Federal Reserve achieving its inflation target and resuming rate cuts [11] Bond Market Analysis - The market sees value in bonds at elevated rates, suggesting they are currently mispriced [8][11] - Disinflation from housing is considered more important than potential deficit increases in influencing bond market volatility [11] Earning Season Focus - The focus is shifting towards the earning season, with hopes that markets can move past political developments and concentrate on profits and earnings [6]