International investors are skiddish and concerned on U.S. market valuations: RBC's Lori Calvasina

Market Valuation & Risk Assessment - The market may be overpricing good news and is vulnerable to negative catalysts beyond tariffs [3][4][7] - US equity valuations are considered stretched based on some models, exceeding full valuation, especially when not factoring in a rosy 2026 scenario [4][5] - International investors are concerned about US valuation levels and their skittishness could impact US equities [2][3] - The market rebound from April 8th lows has been significant, mirroring typical nine-month rebounds after growth scares, suggesting a potential digestion period [5][6] Inflation & Economic Indicators - CPI data indicates emerging inflation pressures in specific components, despite overall numbers [8] - There's debate around demand impacts and pre-buying behavior, with uncertainty about its effects [13][14] - Some price relief is observed in services and shelter, which carry significant weight in overall inflation numbers [13] Sector Analysis & Earnings - Financials earnings are positive, showing resilient consumer spending and a return of M&A activity, indicating growth in the second half of the year [9][10] - Materials sector is upgraded due to reasonable valuations and positive earnings revisions, contrasting with the highly valued industrial sector [15][16] - Some companies may struggle to manage tariffs effectively, leading to adverse reactions, while others have already priced in optimism [11]