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1. Technical analists are getting nervous over rally’s narrow leadership.

With technology stocks powering major US indexes toward record highs, technical analysts see the makings of a selloff in the coming months unless more sectors join the rally.

So far, a key measure of market breadth — the percentage of the S&P 500 members trading above their 200-day moving average — hasn’t budged since May. The equal-weighted version of the S&P 500, which is often seen as a better reflection of market participation, is more than 4% below its own record touched in November. Chart watchers from firms including Janney Montgomery Scott say US stocks can start losing steam over the next couple months without a bigger boost from other major market groups, like financials, transports and small-cap companies.

“The markets are very overbought on a short-term basis and leadership is concentrated heavily toward S&P 500 and Nasdaq 100,” said Dan Wantrobski, technical strategist and associate director of research at Janney Montgomery Scott. “If breadth does not follow the breakouts in S&P and Nasdaq, then we will be on the watch for a correction.” Some chartists also say the relative strength index, which is a momentum indicator that shows whether an asset’s prices have veered too quickly in one direction, is projected to move into a bearish zone later this summer. That typically indicates a reversal may be around the corner. At the moment that index shows that the S&P 500 is hovering close to overbought territory on a 14-day basis.

2. India’s domestically-focused economy offers a buffer against global volatility.

The lowest interest rates in almost three years, ample banking liquidity, tax cuts and benign inflation also provide a favorable backdrop for market gains. Macroeconomic indicators remain solid. The economy grew 7.4% in the January–March quarter, maintaining its position as the world’s fastest-growing major economy. The Reserve Bank of India is forecasting a 6.5% expansion for the fiscal year ending March 2026, even as global growth faces headwinds from tariff-related pressures.

India’s economic growth “will probably be the best deal” among the larger nations, said Prashant Periwal, a portfolio manager for emerging market equities at BlackRock Inc. during a virtual media briefing. “India is probably the cleanest story in the entire emerging market universe,” given the recent supportive measures taken by the central bank, said Chetan Seth, an Asia equity strategist at Nomura Holdings Inc. “We are quite positive on India,” for the long term, he said.

Foreign investors have poured over $3 billion into Indian equities this quarter, reversing course after two consecutive quarters of outflows, even amid trade war concerns. The benchmark Nifty 50 Index is less than 3% away from its all-time high reached in September 2024.

3. PIMCO sees emerging markets in 'Goldilocks' moment.

Emerging markets are enjoying a "Goldilocks" moment, as U.S. President Donald Trump's erratic policy moves push the dollar down and send investors away from U.S. assets.

"This is the most prominent capital rotation we have seen for the best part of two decades ... and we still think we are in the early innings of this," said Pramol Dhawan, PIMCO's head of EM portfolio management.

"We are very constructive on the asset class, we think it is a Goldilocks-type backdrop for EM assets," he said, pointing partly to investor overexposure to the U.S. and a weakened dollar.

The rotation is driven by import tariffs, rising concerns over U.S. debt levels and some loss of confidence in the government there, Dhawan said. Parts of Europe, Asia, and Latin America are the preferred destinations. "Flows have been very strong for the first time in a number of years, and EM valuations are historically very cheap relative to US.”

4. Berenberg sees shift to 'defensive growth' for European telecoms.

It sees sustainable free cash flow growth of 10% annually for the sector over 2025-2030, following prolonged period of lacklustre returns and underperformance vs the wider market. The broker expects that savings in capital expenditure and operating expenditure will boost earnings, with gross capex and opex expected to fall by 5 billion euros and 2.5 billion euros per year respectively over 2025-2030 as telecoms operators complete their fibre/5G network roll outs. It prefers European telecoms stocks that create value for investors, deliver positive cash returns momentum and screen as "relatively cheap" vs the sector.

Here are their targets.

5. “Shell could consider a bid for BP in the future.”

Shell says it hasn't been actively considering an offer for rival BP, but that doesn't mean it won't do so in the future, AJ Bell's Dan Coatsworth says in a market comment. Shell's statement came after The Wall Street Journal reported the U.K.-based oil giant is in early talks to acquire BP.

"Shell might fancy owning certain BP assets, particularly if it can acquire them at a good price. Owning the whole company is another matter. Shell is sitting in a good place without having to resort to more mergers and acquisitions and the CEO has already implied that buying back shares is a better use of the company's money than buying BP," Coatsworth says.

A potential takeover of BP by Shell wouldn't make sense strategically, ING's Quirijn Mulder says. Shell is currently focused on cutting costs, selling underperforming assets, and delivering strong shareholder returns. "Capex is well under control, and shareholders can look forward to a substantial $20 billion remuneration per year," according to the analyst. In contrast, BP has a less favorable track record and is pivoting back toward oil and gas after scaling back its low-carbon ambitions. "We believe a takeover/merger will not benefit Shell's shareholders," Mulder says. Plus, a deal could take until 2027 to complete, followed by at least two more years of complex integration.

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