From the desk of Willie Delwiche.
Key takeaway: It’s bears on strike and bulls on parade. While it persists, it can fuel a rally. Whether it can persist is another question. We have already seen (particularly in less robust trading activity and a downward trend in the NAAIM exposure index) evidence of waning risk appetites. Earnings season may test investor resolve. Expectations are in the sky in terms of both results for the past year and estimates for the year ahead. If the earnings rebound is seen as slowing, investors may struggle to maintain an optimistic outlook for stocks, especially with valuations suggesting that they are priced for perfection at current levels.
Sentiment Report Chart of the Week: Earnings are expected to soar![](https://media-allstarcharts.s3.amazonaws.com/wp-content/uploads/2021/07/willie0714A.png)
Q2 earnings season is heating up and the results are expected to be outstanding. Not only are earnings overall expected to have risen more than 60% from year-ago levels, but they are expected to continue to rise (+30% on a median basis) over the coming year.