Stock markets have had a great year so far. While nobody knows for sure what will happen over the next couple months, there are a few key indicators that make me optimistic.
Fact 1: As of October 31, 2021 the S&P 500 is up 22.6%. History shows that when the S&P 500 is up over 20% during the first 10 months of the year, the final 2 months are up 6.2% on average.
Fact 2: Recent intensity of earnings surprises also supports share prices as we approach the 2021 finish line.
Fact 3: Perhaps most surprising given the inflationary pressures on input prices, corporate profit margins are breaking new records. Again, this supports the bull case for the remainder of the year.