The minutes from the Fed’s June meeting revealed that half of members were in favor of reducing the $85 billion bond buying stimulus by year end.  However, Fed Chairman Ben Bernanke indicated yesterday that “a highly accommodative policy is needed for the foreseeable future”.  This has caused stocks to rally globally this morning and futures indicate a move today that would be near the all time index highs.

We expect the potential for stimulus tapering will soon take a back seat to earnings.  Earnings expectations may have been slashed to a level that creates upside surprise as companies announce results for the second quarter.  We remain bullish as the underlying valuation of index components still looks compelling despite index levels which are at or near all time highs.