We have several ways of looking at market valuations, and most are signaling that stocks are reasonably valued, though not bargains. That said, our Stock/Bond Barometer asset-allocation model is indicating that bonds are the better value as interest rates have risen. The model goes back to 1960 and takes into account real-time prices, historical growth rates and forward-looking forecasts of short- and long-term government and corporate fixed-income yields, inflation, stock prices, GDP, and corporate earnings, among other factors. The output is expressed in standard deviations to the mean, or sigma. The mean reading is a modest premium for stocks of 0.17 sigma, with a standard deviation of 1.06. So stocks normally sell for a slight premium valuation compared to bonds. The valuation level now is a 0.97 sigma premium for stocks, at the high end of the normal (+/- 1 sigma) range. Other valuation measures also show reasonable multiples for stocks. The forward P/E ratio for the S&P 500 is about 21, within the range of 15-24. On price/book, stocks are priced at the high end of the historical range of 5.5-1.8, given that tech stocks, with low capital bases, are the biggest component of the market. The current S&P 500 dividend yield of 1.03% is below the historical average of 2.9%, but the relative reading to the 10-year Treasury bond yield is 22% compared to the long-run average of 39%. On price/sales, the current ratio of 3.5 is above the historical average of 1.8, but well below the 4.0 multiple at the peak of the dot-com bubble. Further, the gap between the S&P 500 earnings yield and the benchmark 10-year government bond yield is 340 basis points, in line with the historical average and well below nosebleed valuation levels of 200 basis points. Lastly, the ratio of the S&P 500 price to an ounce of gold is 1.7, within the normal range of 1-3. Valuation measures suggest to us that the stock market is not currently in danger of entering bubble territory.

The 2Q reporting season is in full swing. Many companies have knocked it out of the park, delivering earnings and revenue numbers that were well over expectations. Meanwhile, we have been looking at the early trends and, as usual, there are companies increasing guidance. Raising guidance is one of our Investing Themes for the second half of 2026. We view management's ability to raise guidance consistently as a catalyst for possible market-beating returns in the quarters ahead. It's even harder for companies to lift guidance during uncertain economic times, as vision is murky. This is especially true now, as the war in the Middle East drags on. Wall Street is also pondering a new Federal Reserve chairman, one with a different view about forward-looking guidance (or in this case, a lack thereof). A good number of companies already have increased guidance in this earnings cycle, so we are putting out a first round of companies that are in Argus' Fundamental Universe of Coverage and that made the grade.

Ford Motor Co., based in Dearborn, Michigan, manufactures and sells automobiles on six continents. With about 169,000 employees and more than 65 plants worldwide, the company's automotive brands include Ford and Lincoln. The company also provides financial services through Ford Motor Credit. Ford Motor common shares are a component of the S&P 500.

The major indices are higher and showing a strong rebound at midday on Thursday. This follows a sharp and broad rout yesterday. GDP indicate slower growth than expected for 2Q while inflation data demonstrates an easing. Yesterday, new Fed Chairman Kevin Warsh stamped his view on rate policy saying that the Fed is looking for 2% inflation. Period. Meanwhile, fighting resumed in the Middle East. Big tech earnings continue.