Muddy Waters

The big things you need to know:

• First, the stats for 2Q26 reporting season have continued to come in mixed, arguing for selectivity rather than a leadership rotation, in our view.
• Second, last week’s earnings commentary from S&P 500 companies reiterated the themes of resiliency and AI tailwinds, but didn’t give us much insight on how to think about recent war developments.
• Third, we review how we’re thinking about the role of the retail investor in today’s US equity market, which differs in some respects from the past, and how we’re monitoring risks on this front.
• Fourth, other things that jump out in our updates this week include the return of S&P 500 Semi & Semi Equipment valuations to average levels and the bright spots we’re seeing in our quant work on Japan.