AOR Update: Mailbag edition

Markets have rebounded sharply from the March geopolitical dip, with U.S. equities quickly returning to all-time highs as recession signals remain broadly constructive. The labor market is showing signs of stabilization, while the latest housing permits data has improved, supporting a still-resilient economic backdrop.

Valuations are elevated and inflation risks tied to Middle East tensions could keep the Fed cautious for longer. Even so, earnings trends have been solid and upward revisions continue to support the rally.

For investors, pullbacks may still offer attractive entry points rather than reasons to step aside. We also see modestly better value outside the U.S., where non-U.S. equities benefit from stronger relative earnings momentum and less demanding valuations.