The reopening story is now getting very real, at least for Wall Street.

Today’s crop of earnings reports are chock-full of companies reporting earnings above expectations and, most importantly, raising guidance.

Take steel maker Nucor, which reported what CEO Leon Topalian called the “most profitable quarter in our Company’s history” on improved pricing and margins. “We expect earnings for the second quarter of 2021 to exceed our first quarter results, setting a new record for quarterly earnings. Most of the end-use markets we serve remain strong and inventories remain lean across supply chains. We believe the current favorable demand environment will continue through the rest of 2021,” he wrote to investors.

Another large industrial, iron ore mining company Cleveland-Cliffs, raised full-year EBIDTA (cash flow), also on expectations of higher prices.

Whirlpool reported net sales growth of 24%, beat earnings expectations by more than 30%, raised full-year guidance by 18%, raised the dividend, and announced an increase in share buybacks.

Homebuilder D.R. Horton reported a significant earnings beat and raised full-year revenue guidance.

In health care, HCA Healthcare raised full-year guidance, joining other providers UnitedHealth and Tenet Healthcare.

One exception to the earnings bright spots: railroads.

Union Pacific was the latest railroad to miss on earnings, following Kansas City Southern and CSX, which also missed. The inability to model bad weather may be the explaining factor: “The Q1 EPS shortfall largely reflects the winter storm disruption,” Baird analyst Garrett A. Holland wrote in a note to clients. “The 2021 outlook is intact and may prove conservative as economic activity strengthens.”

And yet.

The market, as every analyst and strategist has noted, is not cheap. Stocks have had significant run-ups in anticipation that companies would indeed be raising guidance, including companies reporting today: 

“We definitely have clarity into what the market wants, it wants higher earnings estimates,” Alec Young from Tactical Alpha told me. “What we don’t have clarity on is, how big does guidance have to be to drive stocks higher?”

A second, more troubling issue, is the concept of “peak everything.” Peak economic growth. Peak earnings growth. Peak reopening optimism.

In a note to clients today, David Kostin at Goldman Sachs acknowledged that “U.S. economic growth is peaking.” While decelerating growth is usually associated with weaker, but still positive, equity returns, he notes that “equities often struggle just as growth peaks and begins to decelerate.” Deceleration of economic growth typically signals an end to a rally in cyclicals and a rise in more defensive sectors (consumer staples, utilities).

So is this the end to the cyclical rally that has powered the first quarter?

Not necessarily, Kostin says. Though U.S. growth is peaking, the global economy is still accelerating. “Our economists believe economic growth in Europe, Japan, and [emerging markets] ex. China will not peak until 3Q 2021. As a result, some cyclical parts of the U.S. equity market should fare better in coming months than they typically do when U.S. growth begins to slow.”

His advice: Buy a screen of global-facing cyclicals relative to domestic-facing cyclicals. Stocks on his list include Nvidia, Qualcomm, BorgWarner, Mosaic, DuPont, and Freeport-McMoRan, all of which obtain more than 60% of their revenues outside the United States.