10 Reasons To Be Bullish

If you gave me a whiteboard on December 31st of last year and told me to write down three bullets for what I’d like to see happen in the stock market this year, my list would look something like this:

I’d consider all three of those things to be healthy developments for the stock market.

Now that we’re halfway through the year, here’s the progress update: check, check, and check.

But as fast as the positive developments stack, the reasons to be bearish pile up alongside.

First it was the CAPE ratio in a bubble, then it was the Forward PE that was extended, and now it’s an earnings bubble.

An earnings bubble?

We’re all colored by our experiences for better or worse. Maybe I haven’t had enough of them to understand what’s happening. But the concept of an earnings bubble is hard for me to grasp.

Maybe this is why:

July 5th, 2022 was my first day of employment. Inflation YoY was 8.5%. The S&P 500 traded at 3,831. You couldn’t find someone that was bullish.

Since then, we've seen the fastest fed hiking cycle in history, the worst year for a 60/40 portfolio in over a century, a “100% chance of a recession,” the Mag 7 nearly cut in half, the yen carry trade, DeepSeek wipe 560B off of Nvidia in a single day, "Liberation Day" tariffs, the collapse of Silicon Valley Bank, the 10-year yield touch 5%, a government shutdown, the War in Iran, and an S&P 500 that has rallied 3,658 points through all of it.

I tell you this because I'm admittedly influenced by it. You may carry a 2026 hammer looking for a 2000 nail. I carry a 2026 hammer remembering the 2022, 2023, and 2024 nails that never were. For better or worse, that’s the experience I’m equipped with.

So instead of focusing on the potential negatives today, I want to point you to 10 positive developments that have been unfolding.

1/ Forward earnings are outpacing stock prices over the past year:

2/ Participation is broadening:

3/ The S&P 493 are beating the Mag 7 by over 15% YTD:

4/ *Actual earnings are hitting new all time highs for small, mid and large caps:

5/ The AI spending is real, not hype:

6/ Both trailing and forward PEs have come in recently:

7/ Margins are expected to surge higher over the next year:

8/ 5-Year and 10-Year inflation breakevens have fallen recently:

9/ Nine sectors are expected to grow earnings by double digits over the next 12 months.

10/ Concentration has fallen as the market hits new highs:

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That’s all for today. Thank you, as always, for reading. I’ll be back charting for you next week!