Castle Securities says that despite a cooling in retail speculation, the forces
pushing US equities to record highs remain intact. The firm’s head of equity and
equity derivatives strategy, Scott Rubner, says the market is shifting from a
flow-driven regime toward one increasingly determined by earnings, corporate
demand and the macro backdrop. Its data show retail withdrawal cut leveraged-ETF
assets by 28% to $154.0 bln. Concurrently, lower financing costs for equity
positions have eased pressure on Wall Street trading desks and reduced demand
for leverage. A recent run of strong earnings continues to support the market:
earnings are delivering upside surprises, valuations look more attractive, and
share-buyback activity should accelerate as blackout periods end.
