What Happened

  • Major banks reported better-than-expected earnings and steady credit quality.
  • Financials led equity gains while defensives eased.
  • The yield curve steepened modestly as growth expectations firmed.
  • Credit spreads tightened on the improved tone.

What It Means

  • A strong earnings kickoff supports risk appetite into the rest of the season.
  • Steeper curves benefit bank profitability and reinforce value leadership.
  • Tighter credit spreads signal confidence in the macro backdrop.

What I Think

  • I want to see if guidance stays constructive before adding risk.
  • If banks keep beating, the equity rally can broaden.
  • This is the first real test of the soft-landing narrative.

Market Terms

  • Credit quality - The health of loan books and default risk.
  • Curve steepening - Long yields rising relative to short yields.
  • Earnings breadth - How many sectors participate in earnings strength.