The percentage of companies beating on earnings and revenues this season is higher than average and the percentage beating on sales is the highest in four years. Tariffs may be playing a role in the sales beats but either way, the better than expected revenues suggest companies are able to raise prices, a positive sign for corporate resilience. Coupled with softer labor markets and AI, the prospects for operating leverage are strong. And while it's tech and megacaps driving capex growth thus far, Savita believes that even narrow capex growth can lead to a broadening of stock performance. Savita squares all of this with her S&P target which offers limited upside. Whether it's this year or next, the Fed is likely to resume rate cuts and we discuss implications for markets and styles. 

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