Goldman Sachs is turning more bullish on global equities, upgrading its three-month view to overweight just as third quarter earnings season kicks off. Profits keep improving while share prices have stalled, leaving valuations lower without a drop in earnings. Higher bond yields and oil prices that interrupted the rally are now seen as having made stocks more attractive. The bank favors the US and Asia over Europe and suggests a barbell of global technology alongside rate sensitive, dividend paying names. Bonds also get a nod over the longer term, since higher yields have improved income potential, though near term caution remains. Risks have not vanished. Another jump in Treasury yields, pricier energy and midterm election uncertainty could all test the optimism. The upgrade is a positioning call, not a claim that stocks are suddenly cheap, and it reflects a belief that the balance of risk and reward has improved.

Finsum: Pullbacks that leave earnings intact can be quiet opportunities, but investors should resist the urge to chase a single upgrade and instead keep a balanced mix that can handle yields and headlines moving the wrong way.