Risks In Both Directions Heading Into 3Q26 Reporting Season

The big things you need to know:

• First, we enter 3Q26 reporting season seeing risks in both directions.
• Second, the investors we met with in Canada last week were best described as cautiously optimistic, with earnings, midterms, and confusion over recent resiliency in the equity market all top of mind.
• Third, other things that jump out this week include the recent surge in US performance relative to non-US which may be on borrowed time, the bounce back in investor sentiment, and a few important shifts in sector valuations ahead of reporting season.