The S&P 500 is now down 7.8% from its January 26, 2018 high and into negative territory for the year. With the decline, the forward valuation on the S&P 500 has downshifted to 17.0x; down from 18.2x at the start of the year and closer to the 20-year average of 15.7x. While higher bond yields and inflation concerns are prompting investors to reassess valuations, economic fundamentals remain strong and earnings season continues to impress. Indeed, at the halfway point of reporting season, roughly 80% of companies have beat on earnings and/or sales as results have been buoyed by a strong economy and a weaker U.S. dollar. As Lori Calvasina, RBC Capital Markets’ Head of U.S. Equity Strategy, remarks, “if this pace of EPS beats persists, it will be the best reporting seasons since the aftermath of the Financial Crisis.”