Nick Colas & Jessica Rabe (DataTrek)

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2/2 ....Collectively, this implies rising inflation & falling econ growth, a “stagflation lite” macro backdrop. Stocks are rallying because profit margins are at records & climbing, a dynamic that fully offsets this challenge. Still, 5-yrs are saying the Fed needs to hike.

1/2 Rising inflation expectations embedded in 5-yr Treasuries (now 2.69%) are on the verge of exceeding 2023-present highs (2.71%). Meanwhile, real (ex-inflation) 5-yr yields are trending lower & well below their recent average (1.32 vs 1.68%)...

Since the Fed started releasing rate decisions in early 1994, every incoming Chair’s first rate move has been a hike of 25 bps. Bernanke/Powell were off the line quickly after taking office (1 – 2 months), while Yellen waited almost 2 years since the econ was slowly recovering.

2/2 …rather reflects an upside earnings power reset for the Energy and Materials sectors. Tech earnings revisions for the current quarter are actually quite modest (just +1.0%), and this should allow many of these companies to beat once again in Q2 2026.

1/2 Wall Street analysts have been raising their aggregate Q2 S&P 500 earnings estimates by much more than usual (+2.0% in April, prior year averages -0.9 to -2.1%). This is not due to Tech’s blowout Q1 earnings but…

Fed Funds Futures put 78% odds on no rate cuts this year and near-equal odds on a 25 basis point hike (9%) or a cut of similar magnitude (12%).

Q1 financial reporting season continues to run much stronger than average, both in terms of revenue and earnings beat percentages and amounts.

The Nasdaq is running the late-90s internet playbook. Macro shocks stall it, they don't end it. Secular tech bulls last longer than you think... getting out early is the bigger mistake. Watch below! Nasdaq Still Eerily Tracking its 1990s Bull Run youtu.be/AOguCRJBdEQ?si…

The 90s are a clear reminder of the risk of exiting too early and missing outsized long-term gains from a truly disruptive, secular growth theme. Watch our latest video! Nasdaq Still Eerily Tracking its 1990s Bull Run youtu.be/AOguCRJBdEQ?si… via @YouTube

The Nasdaq Comp is still closely tracking its mid- to late-1990s playbook, with the current AI-driven rally mirroring the earlier Internet-led bull market in both magnitude and path. Watch our latest update! youtu.be/AOguCRJBdEQ?si…

One sound bite captures the dramatic change in Tech sector dynamics over the last 6 months: $INTC now has a larger market cap than $PLTR ($499 vs $342 billion).

In our latest video we have an update on a client favorite chart that shows how the Nasdaq’s rally of the last few years almost exactly follows its mid/late-1990s bull run. Watch below! youtube.com/watch?v=AOguCR…

Two-years now yield more than Fed Funds (+25 basis points, 3.89 versus 3.64 percent).  This implies, at the very least, that this market does not expect rate cuts for 24 months.  It could also be interpreted as suggesting a small (25 basis point) rate hike.

Fund investors have been net buyers of US stocks for 5 weeks straight, a remarkable level of conviction.

Small cap Energy ( $PSCE) is outperforming Semis ( $SMH) YTD, highlighting the importance of maintaining an Energy index weight.

DataTrek Research: "New record highs for S&P 500 net margins fully support the index’s rally to new highs and also argue for further upside momentum." @Inc @philrosenn @ReadOpeningBell inc.com/phil-rosen/sto…

DataTrek's Jessica Rabe: "Long-term winners will be determined by the ability to scale with attractive unit economics, making @Waymo the early benchmark in the U.S." @MarketWatch @emilybary marketwatch.com/livecoverage/a…