1. 2025 vs. 2026 selloffs.

"Last year’s price drop of -18.9% was way bigger than this selloff’s -9.1% max drawdown, but this year’s valuation pullback (-18.4%) is almost the same as what we’ve seen last year (-19.5%)."

2. Europe looks less attractive after plunge in US valuation premium.

The valuation discount Europe enjoyed is vanishing fast, with US stocks experiencing a staggering de-rating of their own that’s closing the gap.
The S&P 500 forward P/E ratio has plunged by about 15% since October, eroded by concerns about artificial intelligence disruption and over-spending.
Part of the problem for Europe is the outlook for earnings. Expectations had been trending higher, spurred by faith that fiscal spending and low interest rates were on the way, but those drivers have faded. The European economy and corporate profits are sensitive to oil prices and the days of monetary easing seem to be over. The European Central Bank’s next move will likely be an increase, potentially as early as this month.
Earnings momentum has tilted in favor of the US over the past few months, with a gauge of EPS revisions in positive territory, in sharp contrast to Europe, where downgrades exceed upgrades.

3. US earnings estimates continue to go up.

"S&P 500 forward earnings continues to rise rapidly, while S&P 400 and S&P 600 forward earnings are also moving higher. The broadening breadth of forward earnings in recent months is a bullish development."

4. Retail speculators were panicking.

For only the 3rd week ever, the smallest options traders spent 1/3 of their volume buying put options to open.
The only other weeks were at the height of the Covid washout.

That’s a good sign.

5. Pershing Square Capital Management is bidding for Universal Music Group.

Bill Ackman's Pershing Square proposed merging its acquisition vehicle with Universal Music Group, with a plan to list in the United States in a deal aimed at reviving the world's biggest music label's value.
Pershing values UMG at 30.4 euros a share, a 78% premium to its April 2 price. Yet on Tuesday, the music company's shares were only trading at 19 euros.
The U.S. investor thinks UMG is poorly valued because of lingering uncertainty about Bollore’s stake, an underleveraged balance sheet structure and the lack of a New York listing.
The French billionaire, who controls directly or indirectly more than a third of the music giant, may require more cash to play ball.

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