Corporate C-suite needs to step up to 'calm markets down', says RBC's Lori Calvasina

Summary

Lori Calvasina of RBC Capital Markets discusses a softening market environment driven by decelerating earnings revisions and equity fund outflows, partly blamed on Iran war uncertainty and Fed meeting jitters. She advises short‑term selectivity and highlights long‑term value in semiconductors while avoiding expensive industrials and still‑elevated mega‑cap tech. She maintains a 10% upside S&P 500 target and expects only 5–10% pullbacks.

• Broader de‑risking is evident as upward earnings revisions slow and US equity flows turn to outflows.
• Iran war de‑escalation narrative has stalled, contributing to market churn.
• Financials are favored short term based on good numbers and positive tone.
• Industrials are expensive and should be avoided despite decent earnings.
• Semiconductor earnings revisions remain strong and valuations are back to average, offering long‑term value.
• Top ten mega‑cap stocks have valuations that are off peak but not washed out, with room to fall.
• S&P 500 12‑month target implies roughly 10% upside; 5‑10% pullbacks are expected and not concerning.