1. Economic momentum makes surprise jump in Europe.

Citi's economic surprise index for the euro zone hit its highest in nearly two-and-a-half years at the end of July.
This is a buy signal.

The milestone, says MFS Investment Management, is "significant", and shows how the Eurozone’s macro resilience is more robust than investors had anticipated.
"In our view, this supports the fundamental case for European equities - which are also supported by the repricing of earnings - and European credit," he said.
“U.S. economic surprises are also in positive territory, but are weakening and are around their lowest in about two months, and below the euro zone.”

2. It’s buyback season in the US.

"Today, we estimate that only ~45% of the S&P 500 by weight is eligible to repurchase shares. That figure is expected to increase to 75% by the end of next week and nearly 85% by mid-August as earnings blackout windows expire. Corporate demand is now set to reaccelerate precisely as positioning has become materially cleaner."
Source: Citadel

3. Profit margin expansion.

Higher margins are not just a Tech story: 10 out of 11 sectors are experiencing margin expansion.

4. Until now, Wall Street's valuations have been justified by earnings.

However, it all depends on what happens with AI. Wall Street’s rally over the past year has been largely driven by AI investment, which will total almost $600 billion in the U.S. alone this year, according to Goldman Sachs estimates. But it’s fair to assume that these expectations are already "in the price" of U.S. stocks, so the question is whether these gargantuan outlays can continue.
And in investing, it’s all about relative value. And other markets around the world seem just as attractive right now, maybe even more so.

5. Korea is more than Samsung and Hynix.

While Samsung and Sk Hynix are near their cheapest-ever levels on earnings-based valuation as investors debate whether the memory-chip cycle has peaked, improving prospects for the broader market are also drawing attention to undervalued sectors beyond the two giants.
Excluding tech, the 12-month forward earnings estimates for the MSCI Korea Index have risen more than 70% this year, on course for their biggest annual increase since at least 2020, according to data compiled by Bloomberg. Every other sector outperformed tech over the past month in the nation.
“The recent correction in Korea’s technology sector is encouraging investors to broaden their opportunity set,” said Gary Tan, a portfolio manager at Allspring Global Investments. “Improving domestic demand and a meaningful pickup in earnings expectations across sectors such as consumer and real estate suggest the recovery is becoming more broad based.”
The trend, if sustained, could reshape global allocations after the unwind of crowded AI bets. As investors rotate beyond Samsung Electronics and SK Hynix into domestic-demand and other non-technology stocks, the shift could potentially mark a turning point for a market long dominated by chipmakers.

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