Market Performance - The S&P 500 has achieved five consecutive record closes, resulting in a total rally of 28% since its low on April 8, marking the second-fastest recovery from a 19%+ drawdown in the last 75 years [1] - The index's recovery has formed a textbook V-shape in the 2025 chart [1] Earnings Expectations - A synchronized V-shaped recovery in earnings expectations is observed, with a significant increase in the ratio of companies raising forecasts compared to those lowering them, aligning with the rise in the S&P 500 [2] - The Q2 earnings season shows a positive trend, with a higher-than-average proportion of companies beating consensus estimates, supported by a stabilizing macroeconomic backdrop [3] Earnings Growth - For the 117 S&P 500 companies that reported Q2 results, total earnings increased by 8.3% year-over-year, with revenues up by 5.3%, and 87.2% of these companies beat EPS estimates while 80.3% exceeded revenue estimates [4] - The percentage of companies beating EPS and revenue estimates is above historical averages, with Q2 EPS beats at 87.2% compared to a 20-quarter average of 81.9% and revenue beats at 80.3% versus 70% [5] Long-Term Outlook - Since July, Q3 earnings estimates have risen for half of the 16 Zacks sectors, including Finance, Tech, Consumer Discretionary, Autos, and Energy, with expectations for earnings growth in the latter half of 2025 and into 2026 increasing [6] - Analysts project a 13.9% growth in earnings for 2026, a slight increase from the previous forecast of 13.8% [6] Valuation Concerns - The S&P 500 is currently trading at 22.4 times next year's earnings, above its five-year average of 19.9X and ten-year average of 18.4X, yet corporate profitability remains strong, mitigating concerns over high valuations [8] Investment Options - Investors may consider tracking S&P 500-based ETFs such as Vanguard S&P 500 ETF (VOO), iShares Core S&P 500 ETF (IVV), and SPDR S&P 500 ETF Trust (SPY) [9] - For growth exposure, SPDR Portfolio S&P 500 Growth ETF (SPYG) is recommended, while SPDR Portfolio S&P 500 Value ETF (SPYV) caters to value investors [10]

Let's talk markets now. Kate Moore is chief investment officer at City Wealth. Kate, welcome to the show.Good to see you. Yeah, good morning. Uh, where do you stand on the rally here.Uh, sitting pretty much at record highs for the NASDAQ and the S&P 500. Yeah, so I've been saying I've been pretty uncomfortable with the rally in part because a lot of it has not been driven by fundamentals. We know against the backdrop of this rally, there's been a a decline in terms of earnings expectations.as we continue to ...

Core Insights - The S&P 500 index is expected to see Q2 earnings increase by +4.9% year-over-year, driven by a +3.9% rise in revenues [3][4] - Earnings estimates for Q2 have faced significant downward revisions, particularly in the Tech and Finance sectors, which together account for 51% of total S&P 500 earnings [4][6] - Despite the overall pressure on estimates, three sectors are projected to achieve double-digit earnings growth: Aerospace (+15.1%), Tech (+11.8%), and Consumer Discretionary (+105.6%) [4][5] Sector Performance - 13 out of 16 Zacks sectors have seen earnings estimates decline since the start of Q2, with notable drops in Transportation, Autos, Energy, Construction, and Basic Materials [5] - The only sectors with upward revisions are Aerospace, Utilities, and Consumer Discretionary [5] - The Tech sector's earnings are expected to grow by +11.8% in Q2, although this is a reduction from earlier estimates [6][11] Future Outlook - The Q2 earnings season is anticipated to gain momentum with major financial institutions like JPMorgan, Bank of America, and Wells Fargo reporting [4] - While current estimates for 2025 Q2 have been under pressure, there have not been significant changes to estimates for the following two years [16] - The macroeconomic environment remains uncertain, particularly regarding tariff impacts, which could continue to influence earnings estimates [16]

Core Viewpoint - Best Buy Co Inc reported disappointing first-quarter 2026 earnings, with sales and adjusted earnings falling short of analyst expectations [1][2]. Financial Performance - First-quarter sales decreased by approximately 1% year-over-year to $8.77 billion, missing the analyst consensus estimate of $9.22 billion [1]. - Adjusted earnings were reported at $1.15, below the consensus of $1.31 [2]. - The gross profit margin remained stable at 23%, while the operating margin declined from 3.5% to 2.5% [2]. Guidance and Outlook - The company updated its full-year guidance, expecting annual comparable sales growth to range from a decline of 1% to an increase of 1%, with an adjusted operating income rate similar to last year at approximately 4.2% [2][4]. - For Q2 FY26, comparable sales are expected to be slightly down compared to last year, with an adjusted operating income rate projected at approximately 3.6% [3]. - Fiscal 2026 adjusted earnings guidance was lowered from a range of $6.20-$6.60 per share to $6.15-$6.30 per share, compared to the consensus of $6.13 per share [3]. - Sales guidance was also reduced from $41.4 billion to $42.2 billion down to a new range of $41.1 billion to $41.9 billion, with the consensus around $41.44 billion [3]. Revenue Breakdown - Domestic revenue of $8.13 billion decreased by 0.9%, primarily due to a 0.7% decline in comparable sales [4]. - The decline in comparable sales was driven by decreases in home theater, appliances, and drones, partially offset by growth in computing, mobile phone, and tablet categories [4]. - Domestic online revenue increased by 2.1% on a comparable basis to $2.58 billion, representing 31.7% of total domestic revenue compared to 30.8% last year [4].

Core Viewpoint - Nvidia's stock has historically presented buying opportunities after significant declines, and the current situation appears to be similar, with a potential rebound expected before the earnings announcement on May 28 [1]. Group 1: Earnings Performance - Nvidia has a strong track record of exceeding earnings expectations, having beaten consensus estimates by at least 5% in each of the last four quarters [3]. - The upcoming earnings report on May 28 is anticipated to act as a catalyst for the stock, as quarterly updates often influence share prices positively [2]. Group 2: Customer Insights - Major customers like Amazon, Microsoft, and Google have expressed positive sentiments regarding Nvidia's products, indicating strong demand for its AI chips and GPUs [6][7][9][10]. - Amazon's CEO noted aggressive installations of Nvidia AI chips, while Microsoft highlighted demand outpacing capacity for AI services, suggesting a favorable outlook for Nvidia [7][9]. Group 3: Product Demand - Nvidia's new Blackwell GPUs are experiencing "extraordinary" demand, with $11 billion in revenue reported, marking the fastest product ramp in the company's history [11]. - The company plans to launch the Blackwell Ultra GPU in the second half of the year, with expectations for a positive outlook regarding next-generation chips in the upcoming earnings report [12].

Earnings Report - Ford Motor Company is set to release its earnings results for Q1 after the market closes on May 5, with analysts expecting earnings of 2 cents per share, a significant decrease from 49 cents per share in the same period last year [1] - The projected quarterly revenue is $35.79 billion, down from $39.89 billion a year earlier [1] Development Termination - Ford has reportedly halted the development of an advanced electrical architecture that is essential for modern electric vehicles, similar to those produced by Tesla [2] Stock Performance - Ford shares experienced a 1% increase, closing at $10.28 on Friday [2] Analyst Ratings - Citigroup analyst Michael Ward initiated coverage with a Neutral rating and a price target of $10 [7] - Goldman Sachs analyst Mark Delaney downgraded the stock from Buy to Neutral, reducing the price target from $11 to $9 [7] - Piper Sandler analyst Alexander Potter maintained a Neutral rating and lowered the price target from $13 to $9 [7] - Jefferies analyst Philippe Houchois downgraded the stock from Hold to Underperform, cutting the price target from $12 to $9 [7] - Wolfe Research analyst Emmanuel Rosner downgraded the stock from Peer Perform to Underperform [7]

Group 1 - Charter Communications is set to release its Q1 earnings results on April 25, with expected earnings of $8.37 per share, an increase from $7.55 per share in the same period last year [1] - The company projects quarterly revenue of $13.67 billion, slightly down from $13.68 billion a year earlier [1] - Charter and Comcast have launched satellite connectivity for mobile devices on March 20 [2] Group 2 - Charter Communications shares experienced a decline of 0.7%, closing at $335.33 [2] - Recent analyst ratings include Wells Fargo maintaining an Equal-Weight rating with a price target cut from $400 to $380 [6] - Citigroup reinstated a Buy rating with a price target of $425, while Barclays maintained an Underweight rating and raised the price target from $315 to $320 [6]