Valens Market Phase Cycle Monitor – June 2026 – Corporate Reinvestment Is Giving This Market Another Leg
June 18, 2026
- Corporate Reinvestment Is Giving This Market Another Leg. The potential end of the war with Iran removes a major geopolitical overhang and gives the market a clear near-term catalyst. More importantly, corporate reinvestment continues to accelerate. The net-to-gross PP&E ratio has now moved above pre-pandemic levels, showing that companies have spent trillions of dollars putting new, productive assets to work across AI infrastructure, data centers, supply chain modernization, and other long-term investment projects.
- In A Growth Market, Wait A Bit And High P/Es Become Cheap. Strong earnings growth and positive earnings revision mean the market’s Uniform P/E ratio now sits right around 20x, which is below what we’d expect for this environment.
- Earnings Growth Is Accelerating. Uniform Earnings grew a strong 8% in 2024 and 2025, and they are expected to increase at high teens rates across 2026 and 2027, driven by significant reinvestment, margin improvement, and long-term capital projects.
- Sentiment is bullish, but balanced. The market’s sideways stretch helped reset sentiment earlier this year. However, allocations and correlations may now be moving back toward more extended levels. That argues for watching sentiment closely, even if the broader market setup remains constructive.
- Sentiment concerns have dissipated. With the multi-month stall in the market, many investor sentiment indicators have moved to neutral or even negative levels, offering a floor to a market pull-back barring a material shock. Monthly inflections:
- Credit (55% of macro outlook): Positive (no change)
- Earnings Growth (30%): Positive (no change)
- Momentum/Sentiment (10%): Negative (downgrade)
- Valuations (5%): Positive (no change)
- Timetable Recommendation: 50% Equity/50 Bond Split for 5-10 Year Money and 5 Month Dollar Cost Averaging.