1. When everybody is short.

Retail traders have seemingly given up buying the dip and are even selling rallies.
Retail sold into the ceasefire bounce, in contrast to how they behaved through the tariff tantrum last year.
Even the recovery in stocks this week has not enticed retail to participate in any significant size, judging by the lackluster flows into (unleveraged) US equity ETFs.
Statistically, retail investors are often caught on the wrong foot and the stock market’s upward trend might soon re-assert itself.

2. Earnings momentum has not been derailed by the geopolitical shock.

Interestingly, S&P 500 2026 EPS has continued to move higher through the conflict. Consensus estimates for S&P 500 2026 EPS growth stand at 18.4%, up from 15.4% as of end-Feb.

Earnings growth this year should be supported by solid fundamentals, with US ISM manufacturing near 3-year highs.

Markers of the global cycle, like OECD country leading indicators, are still on the rise. Eurozone earnings are set to improve meaningfully in 2026, with MSCI EMU consensus EPS growth at 18.2%. Emerging Markets stand out with 38.9% expected EPS growth in 2026.

3. Value stocks have had the second-strongest quarterly outperformance over the growth cohort in more than 30 years.

History suggests this may have further to run, according to BI Quantitative Equity Strategy.

4. AI priority!

A survey (from Morgan Stanley) indicates that CIOs’ intended IT budget growth is set to accelerate to +3.7% in 2026. Under the hood, however, Software spend is continuing to drive the improvement, while Hardware, Communications, and Services are expected to decelerate Y/Y in 2026.
The priority assigned to AI continues to rise.

5. China's grip on critical metals.

China alone accounts for roughly half of the world’s known reserves in 2026.
According to the IEA, demand for rare earth metals is set to rise sharply through 2030 and beyond, driven primarily by clean energy applications. Electric mobility and wind power are expected to be the main growth engines, with their combined share of demand increasing significantly through 2050 under current policy scenarios.

At the same time, supply chains remain even more concentrated than reserves. China not only dominates mining but also controls a large share of processing and manufacturing capacity for critical minerals. This imbalance highlights a key vulnerability identified by the IEA: while resources are geographically more widespread, the capacity to refine and convert them into usable materials is far less diversified.

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