North star of equity markets remains profits this earnings, says Truist's Keith Lerner

Market Overview - The major average is pacing for another winning week, all within 2% of record levels [1] - The S&P has been moving sideways more or less for about a month now, the Ecoeight index for about 2 months, which sets up well for a year-end rally [4] - The market is facing a carousel of concerns, including tariff frictions, credit hiccups, and questions around AI bubble or momentum stock breakdown [1][2] Investment Strategy & Sector Analysis - The most important factor of this bull market still remains profits, with forward earning estimates moving higher for the overall market [3] - The defining theme of this bull market is still AI and tech, and the earnings momentum still remains with large cap tech [8] - There's rotation within the MAG7 stocks, with money not leaving the market but rotating through the other MAG7s [9] - The weekly sentiment data show more bears than bulls, indicating it's far from euphorium [7] Commodities - The firm was previously more positive on gold but recently stated the risk/reward was less compelling, as gold became the most stretched to the upside relative to its trend since 2006 [10] - The firm still likes gold structurally and believes it still has a place in a portfolio, but a short-term pullback consolidation is likely [11] Economic Factors - The Fed is likely to cut rates next week, and the market has a rate cut next week completely baked in, probably another one after that [12][14] - The 10-year Treasury is hovering around 4%, about 75 basis points off the highs [14]