What Could Derail The Bull Market Rally?
As I concluded my last Forbes column (Wall Street's Tightrope: Why Smart Money Is Fleeing U.S. Assets), I noted , 'Short term, the setup is there for a relief rally. The market is deeply oversold, and sentiment is at extremes.' That tactical bounce off the April lows wasn't just robust—it shocked seasoned investors, myself included. The force and speed of the S&P 500's rally underscored just how swiftly risk sentiment can turn from caution to euphoria, and reminded us never to underestimate the animal spirits driving this market.
From Strength to Vulnerability
With equities at record highs and nominal growth boosted by legislation like the 'One Big Beautiful Bill' (OBBB), it's tempting to think the cycle can keep running. Fiscal spending, tax incentives, and reforms have all contributed to strong consumer and corporate results. But lurking beneath the surface is a structural risk that could upend equity valuations and market leadership: a renewed surge in the U.S. Treasury term premium.
What Is the Term Premium?
Term premium is the extra return investors demand for holding long-term government bonds rather than rolling short-term debt, compensating for uncertainty about inflation, fiscal policy, and future interest rates. Think of it as the market's way of saying, 'If you want me to tie up my money for a decade or more, pay me for the unknown risks.'
Term Premium Chart: 1960s–2025
This chart shows estimates of the term premium for maturities of one to ten years, spanning from ... More 1961 to the present. Treasury term premium is estimated by current and former New York Fed economists Tobias Adrian, Richard Crump & Emanuel Moench.
From the 1960s through the mid-1980s, the 10-year Treasury term premium was commonly 2–4%, reflecting the high inflation and policy uncertainty of the era. Between the mid-1980s and 2007, the premium receded to an average 1.5–2.5%. After the financial crisis, it plunged toward zero and occasionally negative. As of mid-2025, the premium has rebounded to about 0.75%—but history shows it can go much higher.
How High Could Term Premium Go?
If the term premium were simply to revert to its long-term average of 1.5%, or approach its pre-2008 mean near 2%, that would imply an upside risk of 75–125 basis points on 10-to-30-year Treasury yields from current levels. With deficits large and persistent, and the OBBB amplifying fiscal pressures, the conditions are in place for a further jump. This shift would not only raise discount rates across the capital markets but would also directly pressure valuations—especially for long-duration equities like those dominating the NASDAQ.
Conclusion: Are Markets Prepared?
Equity bulls have plenty to cheer, but they're paying up for the privilege: according to Ned Davis Research, the S&P 500 trades at 29x trailing GAAP earnings and the NASDAQ Composite now boasts a P/E of 48x. These demanding valuations leave broad markets—especially the NASDAQ—exposed to even a modest move higher in yields. If the term premium continues its ascent back toward historical norms, volatility could spike, and market leadership may abruptly reverse. With risks mounting, investors need to ask: are markets truly prepared for their most important cost of capital to spike higher?
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Veralto Reports Second Quarter 2025 Results
WALTHAM, Mass., July 28, 2025 /PRNewswire/ -- Veralto (NYSE: VLTO) (the "Company"), a global leader in essential water and product quality solutions dedicated to Safeguarding the World's Most Vital Resources™ announced results for the second quarter ended July 4, 2025. Key Second Quarter 2025 Results Sales increased 6.4% year-over-year to $1,371 million, with non-GAAP core sales growth of 4.8% Operating profit margin was 22.8% and non-GAAP adjusted operating profit margin was 23.7% Net earnings were $222 million, or $0.89 per diluted common share Non-GAAP, adjusted net earnings were $232 million, or $0.93 per diluted common share Operating cash flow was $339 million and non-GAAP free cash flow was $323 million "We delivered a strong second quarter led by outstanding commercial execution and steady, broad-based customer demand. Our rigorous application of the Veralto Enterprise System continued to support global growth and operating discipline, while also helping mitigate impacts from changes in global trade policies," said Jennifer L. Honeycutt, President and Chief Executive Officer. "Through the first half, we grew core sales mid-single-digits, expanded adjusted operating profit margins and delivered double-digit adjusted earnings per share growth. These results are a testament to the focused efforts of our global team, our durable business model and secular growth drivers across our end markets," "Based on our first half performance, stable demand across our end markets and our current assessment of macro-economic conditions, we raised our full year core sales growth and adjusted earnings per share guidance. Veralto's financial position remains strong, and we continue to be prudent in evaluating capital allocation opportunities to fuel long-term shareholder value," concluded Honeycutt. 2025 Guidance The Company provides forecasted sales only on a non-GAAP basis because of the difficulty in estimating the other components of GAAP sales, such as currency translation, acquisitions, and divestitures. The guidance below includes the Company's current assessment of the macro-economic environment, including tariffs and the Company's actions to mitigate adverse financial impacts. For the third quarter of 2025, Veralto anticipates that non-GAAP core sales will grow mid-single-digits year-over-year with adjusted diluted earnings per share in the range of $0.91 to $0.95 per share. For the full year 2025, the Company raised its adjusted earnings per share guidance range to $3.72 to $3.80 per share, up from its prior guidance range of $3.60 to $3.70 per share. The Company also increased its full year core sales growth assumption to mid-single-digits, up from its prior assumption of low-to-mid-single-digits. The Company maintained its expectation for full year adjusted operating profit margin expansion in the range of flat to +50 basis points year-over-year and for its free cash flow conversion in the range of 90% to 100%. Conference Call and Webcast Information Veralto will discuss its second quarter results and financial guidance for 2025 during its quarterly investor conference call tomorrow starting at 8:30 a.m. (ET). Access to the call, webcast and an accompanying slide presentation will be available on the "Investors" section of Veralto's website, under the subheading "News & Events" and additional materials will be posted to the same section of Veralto's website. A replay of the webcast will be available in the same section of Veralto's website shortly after the conclusion of the call and will remain available until the next quarterly earnings call. The conference call can be accessed by dialing +1 (800) 343-4136 (U.S.) or +1 (203) 518-9843 (INTL) (Conference ID: VLTO2Q25). A replay of the conference call will be available shortly after the conclusion of the call and until August 7, 2025. You can access the replay dial-in information on the "Investors" section of Veralto's website under the subheading "News & Events." ABOUT VERALTO With annual sales of over $5 billion, Veralto is a global leader in essential technology solutions with a proven track record of solving some of the most complex challenges we face as a society. Our industry-leading companies with globally recognized brands help billions of people around the world access clean water, safe food and trusted essential goods. Headquartered in Waltham, Massachusetts, our global team of nearly 17,000 associates is committed to making an enduring positive impact on our world and united by a powerful purpose: Safeguarding the World's Most Vital Resources™. NON-GAAP MEASURES AND SUPPLEMENTAL MATERIALS In addition to the financial measures prepared in accordance with generally accepted accounting principles (GAAP), this earnings release also contains non-GAAP financial measures. Calculations of these measures, the reasons why we believe these measures provide useful information to investors, a reconciliation of these measures to the most directly comparable GAAP measures, as applicable, and other information relating to these non-GAAP measures are included in the supplemental reconciliation schedule attached. In addition, this earnings release, the slide presentation accompanying the related earnings call, non-GAAP reconciliations and a note containing details of historical and anticipated, future financial performance have been posted to the "Investors" section of Veralto's website ( under the subheading "Quarterly Earnings." FORWARD-LOOKING STATEMENTS Certain statements in this release, including statements regarding the Company's third quarter and full year 2025 financial performance and guidance, the Company's differentiation and positioning to continue delivering sustainable, long-term shareholder value and any other statements regarding events or developments that we believe or anticipate will or may occur in the future are "forward-looking" statements within the meaning of the federal securities laws. All statements other than historical factual information are forward-looking statements, including, without limitation, statements regarding: projections of revenue, expenses, profit, profit margins, asset values, pricing, tax rates, tax provisions, cash flows, pension and benefit obligations and funding requirements, Veralto's liquidity position or other projected financial measures; Veralto's management's plans and strategies for future operations, including statements relating to anticipated operating performance, customer demand, cost reductions, restructuring activities, new product and service developments, competitive strengths or market position, acquisitions and the integration thereof, divestitures, spin-offs, split-offs, initial public offerings, other securities offerings or other distributions, strategic opportunities, stock repurchases, dividends and executive compensation; growth, declines and other trends in markets Veralto sells into, including the impact of changes to global trade policies, restrictions on imports, related countermeasures and reciprocal tariffs; future new or modified laws, regulations, accounting pronouncements or public policy changes; regulatory approvals and the timing and conditionality thereof; outstanding claims, legal proceedings, tax audits and assessments and other contingent liabilities; future foreign currency exchange rates and fluctuations in those rates; results of operations and/or financial condition; general economic and capital markets conditions; the anticipated timing of any of the foregoing; assumptions underlying any of the foregoing; and any other statements that address events or developments that Veralto intends or believes will or may occur in the future. Additional information regarding the factors that may cause actual results to differ materially from these forward-looking statements is available in our SEC filings. These forward-looking statements speak only as of the date of this release and except to the extent required by applicable law, the Company does not assume any obligation to update or revise any forward-looking statement, whether as a result of new information, future events and developments or otherwise. VERALTO CORPORATION CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS ($ and shares in millions, except per share amounts) (unaudited) Three-Month Period EndedSix-Month Period EndedJuly 4, 2025June 28, 2024July 4, 2025June 28, 2024 Sales $ 1,371$ 1,288$ 2,703$ 2,534 Cost of sales (549)(514)(1,076)(1,013) Gross profit 8227741,6271,521 Operating costs:Selling, general and administrative expenses (442)(414)(861)(808) Research and development expenses (67)(61)(131)(121) Operating profit 313299635592 Nonoperating income (expense):Other income (expense), net —1(6)(14) Interest expense, net (28)(30)(55)(58) Earnings before income taxes 285270574520 Income taxes (63)(67)(127)(133) Net earnings $ 222$ 203$ 447$ 387 Net earnings per common share:Basic $ 0.89$ 0.82$ 1.80$ 1.57 Diluted $ 0.89$ 0.81$ 1.79$ 1.55 Average common stock and common equivalent shares outstanding:Basic 248.2247.2248.0247.1 Diluted 249.9249.3250.0249.1This information is presented for reference only. VERALTO CORPORATION RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES Reconciliation of GAAP to Non-GAAP Financial Measures ($ in millions) Three-Month Period Ended July 4, 2025SalesOperatingprofitOperatingprofit marginNet earnings forcalculation ofdiluted netearnings percommon shareDiluted netearnings percommonshare Reported (GAAP) $ 1,371$ 31322.8 %$ 222$ 0.89 Amortization of acquisition-related intangible assets A —90.790.04 Other items B —30.230.01 Tax effect of the above adjustments C ———(2)(0.01) Adjusted (Non-GAAP) $ 1,371$ 32523.7 %$ 232$ 0.93 Three-Month Period Ended June 28, 2024SalesOperatingprofitOperatingprofit marginNet earnings forcalculation ofdiluted netearnings percommon shareDiluted netearnings percommon share Reported (GAAP) $ 1,288$ 29923.2 %$ 203$ 0.81 Amortization of acquisition-related intangible assets A —100.8100.04 Tax effect of the above adjustments C ———(3)(0.01) Discrete tax adjustments D ———30.01 Adjusted (Non-GAAP) $ 1,288$ 30924.0 %$ 213$ 0.85 VERALTO CORPORATIONRECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURESNotes to Reconciliation of GAAP to Non-GAAP Financial Measures($ in millions) A Amortization of acquisition-related intangible assets in the following historical periods (only the pretax amounts set forth below are reflected in the amortization line item above):Three-Month Period EndedJuly 4, 2025June 28, 2024 Pretax $ 9$ 10 After-tax 77 B Costs incurred in the three-month period ended July 4, 2025 related to certain strategic initiatives ($3 million pretax and after-tax as reported in this line item). C This line item reflects the aggregate tax effect of all nontax adjustments reflected in the preceding line items of the table. In addition, the footnotes above indicate the after-tax amount of each individual adjustment item. Veralto estimates the tax effect of each adjustment item by applying Veralto's overall estimated effective tax rate to the pretax amount, unless the nature of the item and/or the tax jurisdiction in which the item has been recorded requires application of a specific tax rate or tax treatment, in which case the tax effect of such item is estimated by applying such specific tax rate or tax treatment. D Discrete tax matters relate to changes in estimates associated with prior period uncertain tax positions, audit settlements and excess tax benefits from stock-based compensation. VERALTO CORPORATIONRECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURESSales Growth by Segment, Core Sales Growth by Segment % Change Three-Month Period Ended July 4, 2025 2024 PeriodSegmentsTotal CompanyWater QualityProduct Qualityand Innovation Total sales growth (GAAP) 6.4 %6.2 %6.8 % Impact of:Acquisitions/divestitures (0.1) %(0.1) %— % Currency exchange rates (1.5) %(1.1) %(2.2) % Core sales growth (non-GAAP) 4.8 %5.0 %4.6 % VERALTO CORPORATIONRECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES Forecasted Core Sales Growth, Adjusted Operating Profit Margin, Adjusted Diluted Net Earnings per Share and Free Cash Flow to Net Earnings Conversion Ratio The Company provides forecasted sales only on a non-GAAP basis because of the difficulty in estimating the other components of GAAP revenue, such as currency translation, acquisitions and divested product lines. Additionally, we do not reconcile adjusted operating profit margin (or components thereof), adjusted diluted earnings per share or free cash flow to net earnings conversion ratio to the comparable GAAP measures because of the difficulty in estimating the other unknown components such as investment gains and losses, impairments and separation costs, which would be reflected in any forecasted GAAP operating profit, forecasted diluted earnings per share or forecasted net earnings ratio.% Change Three-MonthPeriod Ending October 3,2025 vs. Comparable 2024Period Core sales growth (non-GAAP) +Mid-single-digitsThree-Month Period EndingOctober 3, 2025 Adjusted Diluted Net Earnings per Share (non-GAAP) $0.91 to $0.95% Change Year EndingDecember 31, 2025 2024 Period Core sales growth (non-GAAP) +Mid-single-digitsYear Ending December 31, 2025 Adjusted Operating Profit Margin (non-GAAP) flat to +50 basis points Adjusted Diluted Net Earnings per Share (non-GAAP) $3.72 to $3.80 Free cash flow to net earnings conversion ratio (non-GAAP) 90% to 100% VERALTO CORPORATIONRECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURESCash Flow and Free Cash Flow($ in millions) Three-Month Period EndedJuly 4, 2025June 28, 2024Year-over-YearChange Total Cash Flows:Net cash provided by operating activities (GAAP) $ 339$ 251 Total cash used in investing activities (GAAP) $ (40)$ (11) Total cash used in financing activities (GAAP) $ (15)$ (13) Free Cash Flow:Total cash provided by operating activities (GAAP) $ 339$ 251 ~ 35.0 % Less: payments for additions to property, plant & equipment (capital expenditures) (GAAP) (16)(11) Free cash flow (non-GAAP) $ 323$ 240 ~ 34.5 %We define free cash flow as operating cash flows, less payments for additions to property, plant and equipment ("capital expenditures") plus the proceeds from sales of plant, property and equipment ("capital disposals"). Statement Regarding Non-GAAP Measures Each of the non-GAAP measures set forth above should be considered in addition to, and not as a replacement for or superior to, the comparable GAAP measure, and may not be comparable to similarly titled measures reported by other companies. Management believes that these measures provide useful information to investors by offering additional ways of viewing Veralto Corporation's ("Veralto" or the "Company") results that, when reconciled to the corresponding GAAP measure, help our investors: with respect to the profitability-related non-GAAP measures, understand the long-term profitability trends of our business and compare our profitability to prior and future periods and to our peers; with respect to core sales and related sales measures, identify underlying growth trends in our business and compare our sales performance with prior and future periods and to our peers; and with respect to free cash flow and related cash flow measures (the "FCF Measure"), understand Veralto's ability to generate cash without external financings, strengthen its balance sheet, invest in its business and grow its business through acquisitions and other strategic opportunities (although a limitation of free cash flow is that it does not take into account the Company's non-discretionary expenditures, and as a result the entire free cash flow amount is not necessarily available for discretionary expenditures). Management uses these non-GAAP measures to measure the Company's operating and financial performance. The items excluded from the non-GAAP measures set forth above have been excluded for the following reasons: Amortization of Intangible Assets: We exclude the amortization of acquisition-related intangible assets because the amount and timing of such charges are significantly impacted by the timing, size, number and nature of the acquisitions we consummate. While we have a history of significant acquisition activity, we do not acquire businesses on a predictable cycle, and the amount of an acquisition's purchase price allocated to intangible assets and related amortization term are unique to each acquisition and can vary significantly from acquisition to acquisition. Exclusion of this amortization expense facilitates more consistent comparisons of operating results over time between our newly acquired and long-held businesses, and with both acquisitive and non-acquisitive peer companies. We believe however that it is important for investors to understand that such intangible assets contribute to sales generation and that intangible asset amortization related to past acquisitions will recur in future periods until such intangible assets have been fully amortized. Restructuring Charges: We exclude costs incurred pursuant to discrete restructuring plans that are fundamentally different (in terms of the size, strategic nature and planning requirements, as well as the inconsistent frequency, of such plans) from the ongoing productivity improvements that result from application of the Veralto Enterprise System. Because these restructuring plans are incremental to the core activities that arise in the ordinary course of our business and we believe are not indicative of Veralto's ongoing operating costs in a given period, we exclude these costs to facilitate a more consistent comparison of operating results over time. Other Adjustments: With respect to the other items excluded from the profitability-related non-GAAP measures, we exclude these items because they are of a nature and/or size that occur with inconsistent frequency, occur for reasons that may be unrelated to Veralto's commercial performance during the period and/or we believe that such items may obscure underlying business trends and make comparisons of long-term performance difficult. With respect to core operating profit margin changes, in addition to the explanation set forth in the bullets above relating to "restructuring charges" and "other adjustments", we exclude the impact of businesses owned for less than one year (or disposed of during such period and not treated as discontinued operations) because the timing, size, number and nature of such transactions can vary significantly from period to period and may obscure underlying business trends and make comparisons of long-term performance difficult. With respect to core sales related measures, (1) we exclude the impact of currency translation because it is not under management's control, is subject to volatility and can obscure underlying business trends, and (2) we exclude the effect of acquisitions and divested product lines because the timing, size, number and nature of such transactions can vary significantly from period-to-period and between us and our peers, which we believe may obscure underlying business trends and make comparisons of long-term performance difficult. With respect to the FCF Measure, we exclude payments for additions to property, plant and equipment (net of the proceeds from capital disposals) to demonstrate the amount of operating cash flow for the period that remains after accounting for the Company's capital expenditure requirements. View original content to download multimedia: SOURCE Veralto
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Simpson Manufacturing: Q2 Earnings Snapshot
PLEASANTON, Calif. (AP) — PLEASANTON, Calif. (AP) — Simpson Manufacturing Co. (SSD) on Monday reported net income of $103.5 million in its second quarter. The Pleasanton, California-based company said it had net income of $2.47 per share. The building materials company posted revenue of $631.1 million in the period. _____ This story was generated by Automated Insights ( using data from Zacks Investment Research. Access a Zacks stock report on SSD at
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Central Garden & Pet to Announce Q3 Fiscal 2025 Financial Results
WALNUT CREEK, Calif., July 28, 2025--(BUSINESS WIRE)--Central Garden & Pet Company (NASDAQ: CENT) (NASDAQ: CENTA) ("Central"), a market leader in the pet and garden industries, will release its fiscal 2025 third quarter results for the period ending June 28, 2025, after market close on Wednesday, August 6, 2025. On the same day, Central will host a conference call at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time), led by CEO Niko Lahanas and CFO Brad Smith, to review these results and to provide a business update. A live webcast, replay and related materials will be available at To join by phone, please dial +1 (201) 689-8345 for both domestic and international participants. About Central Garden & Pet Central Garden & Pet Company (NASDAQ: CENT) (NASDAQ: CENTA) understands home is central to life and has proudly nurtured happy and healthy homes for over 45 years. With fiscal 2024 net sales of $3.2 billion, Central is on a mission to lead the future of the pet and garden industries. The Company's innovative and trusted products are dedicated to helping lawns grow greener, gardens bloom bigger, pets live healthier, and communities grow stronger. Central is home to a leading portfolio of more than 65 high-quality brands including Amdro®, Aqueon®, Cadet®, C&S®, Farnam®, Ferry-Morse®, Four Paws®, Kaytee®, Nylabone® and Pennington®, strong manufacturing and distribution capabilities, and a passionate, entrepreneurial growth culture. Central is based in Walnut Creek, California, with over 6,000 employees primarily across North America. Visit to learn more. View source version on Contacts Investor & Media Contact Friederike EdelmannVP of Investor Relations & Corporate Sustainabilityfedelmann@ | (925) 412 6726 Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
