Climbing the Wall of Worry

The big things you need to know:

• First, despite the strong rebound in the US equity market, investor sentiment remained subdued last week. This signals to us that there is room for US equities to run and climb a wall of worry.
• Second, 1Q26 reporting season got off to a strong start last week, evidenced by a sharp pickup in the percent of companies beating consensus EPS forecasts and reassuring commentary from companies.
• Third, other things that jump out in our latest updates include strong outperformance by Large Cap Growth and growth-oriented sectors in April, the low-quality burst of leadership within Small Cap, and strengthening inflows to the US amid outflows from Europe