Earnings and Expectations - Companies are likely to beat EPS, driven by tech, with expectations around 7%-8% in Q3 [1] - Analysts have been raising estimates coming into Q3 earnings season, unlike typical earnings seasons [3] - Companies can beat earnings again, probably printing in the low double digits [3] Consumer Trends - The high-end consumer has stayed strong, while the lower-end consumer has struggled [6] - There is no significant impact from tariffs in terms of spending and consumer sentiment yet, but potential impact in holiday season or early 2026 [6][7] Technology and AI - Tech stocks are expected to lead earnings growth [3] - AI and MAG Seven stocks can continue to drive the market higher, with Alphabet being a preferred choice [10] - Google's advertising business is not significantly at risk because of OpenAI, and Google Gemini has a lot of upside [10] - The winners in AI are large mega-cap companies like Alphabet, Microsoft, NVIDIA, and Broadcom, with low supply [12] - Infrastructure, particularly data centers, is a top pick, especially those supporting AI [14] Market Outlook - Q4 is normally a strong quarter from a seasonal point of view, especially when the market is up substantially year to date [13] - Odds are in favor for the rally to continue [13]

Core Viewpoint - Sherwin-Williams is poised for modest growth in its upcoming third-quarter results, with analysts projecting a year-over-year profit increase of 2.4% to $3.45 per diluted share, despite a mixed history of meeting consensus estimates [2][6]. Company Overview - Sherwin-Williams, headquartered in Cleveland, Ohio, operates in over 120 countries, focusing on paints and coatings, with a market capitalization of $84.03 billion [1]. Financial Performance - For the fiscal year 2025, the company's profit is expected to grow marginally to $11.34 per diluted share [3]. - In the second quarter, net sales increased slightly year-over-year to $6.31 billion, but adjusted EPS fell from $3.70 to $3.38, indicating mixed results [6]. Stock Performance - Over the past 52 weeks, Sherwin-Williams' stock has underperformed, losing 9.6%, while the S&P 500 Index gained 17.4% during the same period [4]. - Compared to the basic materials sector, represented by the iShares U.S. Basic Materials ETF, which gained 2.5% over the past year, Sherwin-Williams has also lagged behind [5]. Analyst Ratings - The consensus rating among 27 analysts is "Moderate Buy," with 14 "Strong Buy" ratings and a mean price target of $385.76, suggesting a 14.3% upside from current levels [8].

Core Insights - The upcoming earnings reports from JPMorgan, Wells Fargo, and Citigroup are anticipated to provide valuable insights into the economic landscape, with these banks showing strong performance despite recent weaknesses [2][3] - There is optimism regarding loan demand and a decline in delinquencies, alongside a robust capital market and trading activity, contributing to a positive outlook for major banks [3][4] Financial Performance Expectations - For Q3 2025, total S&P 500 index earnings are projected to increase by +5.5% year-over-year, driven by +6.2% higher revenues [6][10] - Excluding the Tech sector, earnings growth for the rest of the S&P 500 is expected to be only +2.7% [6] - The "Magnificent 7" group is forecasted to see a +12.0% increase in earnings on +14.8% higher revenues for Q3 [6] Earnings Estimates for Major Banks - JPMorgan is expected to report earnings of $4.79 per share on revenues of $44.66 billion, reflecting year-over-year growth rates of +9.6% and +4.7% respectively [8] - Estimates for Citigroup and Wells Fargo have shown positive revisions, although not as significant as those for JPMorgan [8] Sector-Wide Earnings Trends - The Zacks Finance sector is projected to experience a +10.7% increase in Q3 earnings compared to the previous year, with revenues expected to rise by +6.1% [9][10] - Positive Q3 results and management commentary are crucial for sustaining the favorable revisions trend observed recently [10][14]

Core Insights - The Russell 2000 has outperformed the S&P 500, rising 41% in the last six months compared to the S&P's 35% increase, indicating a significant shift in market dynamics for small caps [2][3] - Small caps have historically underperformed large caps over the past decade, but current valuations are at their lowest, presenting a potential buying opportunity [3][4] - Earnings growth is identified as the primary driver for small cap stock performance, with expectations for positive earnings growth following a period of earnings recession [4][5] Small Cap Market Dynamics - The small cap sector has experienced a long period of underperformance relative to large caps, but recent trends suggest a turnaround since "Liberation Day" [2][3] - There has been a notable increase in IPO activity, with September marking one of the largest IPO markets on record, reflecting renewed investor interest in small caps [5][6] - The Federated Kaufman Small Cap Fund has seen nine takeouts this year, indicating robust activity and interest in small cap investments [5][6] Economic Outlook - The market outlook is bullish, with projections suggesting the market could reach approximately 8,700 by 2027, supported by anticipated interest rate cuts from the Fed [7] - The current economic environment is characterized as a "low inflation Goldilocks growth environment," which is favorable for small caps and longer-duration assets [7][8] - The demand for electricity is expected to grow significantly due to the rise of data centers and technology, positioning companies like Centuri (CTRI) favorably in the market [8][9]

Core Viewpoint - Truist Securities has raised its price target on Deere & Company to $609.00 from $602.00 while maintaining a Buy rating, indicating a positive outlook despite muted investor sentiment ahead of earnings [1] Group 1: Market Sentiment and Expectations - Investor sentiment toward Deere remains muted ahead of earnings, creating a favorable setup for potential growth [1] - Analysts believe that market expectations for 2026 are overly bearish, particularly following a 20% decline in early orders for sprayers [1] Group 2: Segment Performance and Outlook - The outlook for large agricultural equipment in North America is uncertain due to trade-related risks, but a uniform 20% decline across all segments is not expected [2] - Early signs of improvement are noted in European and Brazilian agriculture, as well as in Deere's Construction and Forestry divisions [2] Group 3: Earnings Potential - Deere's earnings could benefit from a 10% underproduction in Small Ag, Turf, and Construction equipment, along with ongoing cost-cutting initiatives [3] - Despite headwinds in large agriculture, Deere is still positioned to grow earnings per share in 2026 [3] Group 4: Upcoming Catalysts - The pending decision on the U.S. Renewable Fuel Standard, expected by late October, is highlighted as a potential catalyst for U.S. farmers [4] - Deere's upcoming investor day on December 8 is anticipated to outline long-term strategic and financial goals [4]

Market Outlook & Strategy - Edward Jones believes the market is in a unique period, driven by both the secular theme of AI and a cyclical theme supported by potential Fed rate cuts [4] - Edward Jones anticipates broadening earnings growth beyond technology and AI sectors in the coming year, potentially leading to broader market leadership [5] - While acknowledging the S&P 500's significant rise of over 35% since its low, Edward Jones doesn't foresee the fundamental story being derailed, though volatility is possible [5] - Edward Jones expects the Fed to move towards a neutral stance, potentially cutting rates from 425-450 basis points to 325-350 basis points, which could stimulate consumer demand and benefit cyclical market sectors [7] - Edward Jones favors diversification as a key investment strategy, emphasizing exposure to both large-cap (AI technology) and mid-cap (cyclical expansion) stocks [8][10] AI Theme & Investment - Edward Jones views the AI theme as having a long runway, starting with data center infrastructure and semiconductors, and eventually extending to sectors benefiting from AI's productivity gains, such as financial services, healthcare, and industrials [11] - Edward Jones suggests that the current AI trend is more akin to the 1995-1996 period, implying substantial growth potential [10] Diversification & Alternative Investments - Edward Jones notes increased interest in gold as a diversifier due to factors like softening dollar and fiscal debt, but suggests exposure through gold mining stocks, particularly in Canada's material sector [13][14] - Edward Jones recommends a basket of commodities, including precious and industrial metals, for diversification in the next phase of the cycle [14]

Core Insights - The Q3 earnings season is expected to show strong growth for the S&P 500, with a consensus earnings growth forecast of 8.0%, reflecting an 80-basis-point improvement from previous lows [1] - Key sectors driving this growth include technology, energy, and financials, with expectations for continued positive performance into Q4 [2] Technology Sector - The Technology Select Sector SPDR Fund (XLK) is projected to have the highest earnings growth at 21%, with revisions up approximately 550 basis points since the cycle low [3] - NVIDIA is a primary driver of this growth, with 95% of analysts raising earnings estimates and an expected earnings growth of over 50% [4] - Other significant contributors include Microsoft, Apple, Broadcom, and Oracle, collectively representing 50% of the Information Technology Sector [4] Utilities Sector - The Utilities Select Sector SPDR Fund (XLU) is forecasted to have the second-strongest growth at 18%, with estimates rising over 225 basis points since the start of Q3 [8] - Companies like Constellation Energy are expected to grow earnings by more than 15%, with nearly 60% of analysts raising their targets during the reporting period [8] - The sector is benefiting from increased power consumption driven by AI and electric vehicle demand, leading to modernization investments [7] Financial Sector - The Financial Select Sector SPDR Fund (XLF) is expected to grow by 11.5% in Q3, supported by strong net interest income and consumer resilience [11] - Leading companies such as Berkshire Hathaway and JPMorgan are well-positioned to leverage AI technologies for growth [12] - The sector's consensus forecasts have improved by 400 basis points from earlier lows, indicating a positive outlook [11]

Market Momentum and Valuation - The market is driven by momentum and technicals, with relentless dip buying [2] - Valuations are high, with markets priced at almost 23 times forward earnings, indicating potential overvaluation [2] - The risk is that there is no risk, suggesting a potential bubble [10] Earnings and Growth - US earnings are strong, driven by high-quality companies with the best earnings revisions [3] - Speculation is more prevalent overseas, with MSCI EA up 30% in US dollars on 1% earnings growth, and Chinese stocks up almost 40% on 0% earnings growth [3] - AI is a significant factor in current earnings growth, raising concerns about the economy and market performance without it [5][6] Investment Strategy - The firm is participating in the market but owning higher quality stocks with better balance sheets within the technology sector, staying away from more speculative corners [7] - The firm favors midcaps due to their different sector composition (industrials and regional banks) and a 30% discount [10][11] - US midcaps are considered one of the only places to find value, as international stocks are no longer cheap [14] Risks and Concerns - The potential bursting of a bubble due to excessive froth is a key risk [10] - Over-reliance on AI for earnings growth is a concern [5][6] - Small caps are viewed with concern due to profitability and debt levels [14]

Home Builders Industry - Evercore has downgraded the home builders sector, indicating that margins must bottom before stocks can rerate, which is not expected to happen in the next several months [1] - D.R. Horton (DHI) shares fell by 5%, reflecting a broader negative sentiment in the home builders group [1] Milrose Properties - Milrose Properties was spun off from Lennar (LAR) in February and operates as a land bank, separating high-risk, high-reward growth from asset-heavy, slow-growth cash flow operations [3][4] - The company holds thousands of acres of land across 10 states and offers a 9% dividend yield, with plans to distribute all earnings and funds from operations as dividends [4][5] - Milrose has a unique external management structure by Kennedy Lewis, which may impose a valuation cap but allows for consistent cash flow through land options for builders like Lennar [6][5] Kimberly Clark - Kimberly Clark, known for brands like Kleenex and Huggies, is trading at a 52-week low with a 4.2% dividend yield and a price-to-earnings ratio of 16.5 [8][10] - The company has divested its international family care and professional business, which analysts believe has not been fully accounted for in earnings projections [9] - JP Morgan has set a price target of $144 for Kimberly Clark, suggesting potential for earnings growth of 3-6% in the future, with possible upward revisions from analysts [10][11]

Core Insights - Nike has returned to revenue growth but continues to face profit pressures due to restructuring efforts [1][7] - The company commands a 16% share of the sportswear market, maintaining its dominance [2] - Nike's marketing strategy, which includes a $1.2 billion demand creation expense, plays a crucial role in its brand visibility and consumer engagement [4] Company Strengths - Nike's ability to design products for both athletes and regular consumers is a core competency [3] - The brand's global recognition and differentiation support its pricing power, allowing for consistent gross margins above 40% [5][8] Financial Performance - Nike's net income fell by 31% in the first quarter, with profits of $727 million, significantly lower than three years prior [9] - The company experienced a 1% sales increase in Q1, ending a five-quarter decline [7] Long-term Outlook - Historical performance shows a total return of 2,750% over the past 30 years, outperforming the S&P 500 [10] - Future earnings growth is expected to be less robust, indicating that substantial long-term returns may not be achievable [12]