Resilience With a Dose of Caution

The big things you need to know:

• First, the three things that stuck out to us in our review of earnings calls last week included outlooks that emphasized resiliency but contained a dose of caution, the conversation on Iran war impacts (present and future) getting underway, and descriptions of cautious but stable consumers.
• Second, with US equities breaking out to a new 2026 high relative to non-US equities, we note that valuations suggest there’s room for this trade to run and that weak earnings revisions breadth is not a problem unique to the US.
• Third, funds flows are shifting back to Financials and Growth, which we think makes sense from a valuation and earnings growth perspective.