Market Performance - Market experienced a 5% pullback but has resettled [3] - Market is within 30 points of 6,900 [3] - VIX has a 15 handle [4] Sector Rotation - Benign rotational action occurred, with semis and Alphabet cooling off, while Meta stepped in [4] - Retail stocks are moving, indicating a reflation trade [5] - Banks are leading, and consumer lending companies are making new highs in share prices [5] Investment Themes - Market is positioning for a cyclical reacceleration [5] Business Activities - Brad Jacobs, author of "How to Make a Few More Billion Dollar," celebrated his book launch [1] - Brad Jacobs has done more than 500 acquisitions [2] - Mckenley Acquisition Corp did the honors [3]

Core Insights - The earnings growth in 2026 is expected to be driven primarily by technology and communication services, with artificial intelligence playing a significant role [2][3] - There is a shift towards quality factors in the market, with healthcare and financial sectors showing strong performance, alongside technology [4][5] - The market dynamics in 2026 are anticipated to be more challenging, with a potential for elevated volatility and a need for different positioning compared to previous years [3][5] Earnings Growth - The majority of earnings growth in recent quarters has been attributed to artificial intelligence, particularly in technology and communication services [2] - A cyclical reacceleration is expected in 2026, with productivity and stable GDP growth contributing to this trend [6][7] Sector Performance - Financials and healthcare are expected to perform well in a reacceleration phase, with a potential focus on value-centric names and cyclical sectors [8] - Consumer staples may also become attractive as a defensive play in the face of market volatility, especially during the midterm election year [9] Market Outlook - Bank of America projects a 4% increase in the S&P 500, targeting a price of 7100 for 2026, indicating a positive outlook despite potential challenges [10][11] - The leadership in the market is expected to change, with a focus on sectors that can withstand volatility and provide stability [9]