We're biased in favor of growth and U.S. equities continuing to lead, says RBC's Lori Calvasina

• Strong Q2 earnings have helped the market, with the growth trade getting back on its feet after an 'earnings lull'.
• Valuations are 'fine' and sentiment is 'subdued', but 'annoying questions' about interest rates and inflation persist.
• Historically, up to four Fed rate hikes in a 12-month period are manageable for equity markets (average 13.7% return), but more aggressive tightening could lead to flat or negative performance.

Lori Calvasina of RBC Capital Markets discusses the current market setup, highlighting strong Q2 earnings and generally fine valuations. She notes a bias for growth and U.S. equities to continue leading but cautions that aggressive Fed rate hikes and persistent inflation could significantly dampen future returns, despite the market's ability to absorb a few hikes.