Strong Earnings Keep PNC’s Agati Bullish on Stocks

Summary

PNC Chief Investment Officer Amanda Agati discusses why resilient earnings and economic fundamentals keep her bullish on US stocks despite elevated Treasury yields and midterm uncertainty. She expects a strong second half, would buy volatility into the midterms, and sees longer-term earnings growth slowing by 2027. Agati also argues the 5% 10-year yield level may not end the equity rally and that deficits, inflation, and duration risk are driving long-end yields higher.

• Agati highlights Q2 earnings growth at 50% year over year and resilient economic fundamentals as support for US stocks.
• She sees a strong second-half setup and would use any midterm-related correction or downdraft to reposition portfolios.
• She notes positive earnings revisions may continue near term but expects tougher comparisons, possible peak earnings in 2026, and slower growth in 2027.
• Agati says a 5% 10-year Treasury yield is a psychological headwind, but the historical equity-struggle relationship may be breaking down.
• She attributes higher long-end yields to warm inflation, higher risk premium, significant duration risk, and deficit/debt concerns.
• Her Fed view is that the central bank does not need to hike or make a big move in September.