What a difference a month makes!

Last time Elizabeth joined Charles, the S&P 500 was around 6,590. Today, it’s over 7,100.

That’s an ~8% jump in roughly a month and 12%+ jump since the March 30th lows! And it’s not just momentum.

▶️ Watch Elizabeth Evans, CFP^®‘s latest conversation with Charles Payne on Fox Business to find out what’s driving this move up in the markets. She believes it’s a healthy setup for the equity market.

 

Transcript:

Charles: All right, folks, my next guest says that, ‘what a difference a month makes.’ And she’s absolutely right. I’m going to bring in now Evans May Wealth Managing Partner Elizabeth Evans. Elizabeth, tell us about it. What do you mean, what? What a what happened in the last month?

What happened [in the markets] in the last month?

Elizabeth: Well, good afternoon, Charles. You had me on the show March 25th, and we were at 6,590 on the S&P and fast forward to today, we’re at 7,100 and change.

So, that’s an 8% move in roughly a month and a 12% bounce since the March 30th lows. So, you know, a lot of this is being the growth economists are saying it’s because of a more clear outlook with U.S. and Iran, which is certainly true, but also earnings growth for 2026 and 2027 is 4% higher than it was in January.

That’s happening at the same time that the S&P 500 forward PE has contracted to 21 times. The combination of earnings growth and multiple contraction is very healthy for the equity market.

Are you concerned that earnings revisions are up but may be misleading?

Charles: Are you concerned though? Some are saying, yeah, if you look if you if you’re more nuanced though, there really is just three sectors. And if you even look deeper than that, it’s just three companies, right? It’s Micron, Broadcom, and maybe an oil company. So, that this is all misleading.

Elizabeth: The market breadth and the earnings breadth is concerning. So, technology and consumer, communication services have delivered 70% of the rebound since the March 30th lows. And only three sectors, materials, technology, and energy, have had positive earnings revisions since the start of the U.S.-Iran conflict. The top ten contributors have attributed 105% of the total. So those two are negatives.

You like financials. Why is Citi at the top of your list?

Charles: Let’s talk about the opportunities though, right? I know you like financials and more specifically Citi. Why is that at the top of your list?

Elizabeth: Financials have been so oversold. They were the worst price-performing sector in the market going into earnings season. Citi is hands down our top pick.

And that is really because of their restructuring. That is a catalyst for continued outperformance. They’re 90% of the way through the restructuring. Revenues are up. Expenses are down. Efficiencies are being realized. But from a price to book standpoint, they’re still trading at half of their peers. So, we think there’s an opportunity here for the stock to rerate into a multiple more comparable to their peer group.

They’ve doubled in the last year. And yet given how strong this recent earnings report was, I think you’ll see analysts continue to increase price targets going forward.

GE Aerospace: What are retail investors getting wrong?

Charles: So, I know you also like semis particularly Taiwan Semi, which, by the way, is like every time, as much as we look at Nvidia the last few years, it’s always been Taiwan Semi that’s given that group the spark.

But I want to shift because we’re running out of time to to your to your other pick here, which is GE Aerospace because I find this one to be very compelling. They just look like great numbers to me. And the stock is down. Obviously, you think the street’s getting something wrong here.

Lizzie: This stock, I couldn’t agree more, Charles. This stock is moving in very close correlation with U.S.-Iran and the outlook for oil prices. More recently, in their stellar earnings report, management had conservative, low double-digit revenue growth, noting that they expect sustained higher oil prices to persist through the third quarter. And I believe that the market is punishing that, them for that.

But this is a company that is an industrial with real growth, expanding margin margins and serving a structurally undersupplied market. I think there’s a lot of upside here.

UnitedHealth (UNH)

Charles: All right. Now, Elizabeth, we got about 30s to go. I’ve got to give you props on your UnitedHealth, okay? I gave you a hard time when it went down initially. It’s coming on like gangbusters. Congratulations. Are you still holding?

Lizzie: We are. Thank you, Charles. It was, it took longer than expected, but the turnaround story is finally coming to fruition.

Charles: Yeah, it looks good. You were right. Elizabeth, have a great weekend. See you soon.

Lizzie: Thank you, Charles.

Charles: Thank you. All right, folks.