October Swan Dive: 5 Reasons to be Bullish

We're back with a new and improved newsletter and we're pleased to introduce a monthly Swan Dive. We received some feedback regarding the format of previous newsletters being too dense and long-winded for readers. Moving forward, you can expect to hear from us at the beginning of each month with a quick-hitting and timely topic ranging from financial markets, planning topics and industry trends. As always, we’re here to help you stay ahead of the game. Thank you for allowing us to be part of your financial journey. Let’s dive in!

5 Reasons to be Bullish

Investor sentiment is giving off a sour vibe right now. Rising interest rates, persistent inflation, and high gas prices dominate the headlines. But the picture isn’t nearly as bleak as the evening news suggests. Beneath the noise, the fundamentals tell a far more encouraging story. Here are five reasons we remain optimistic.

Earnings are Booming

This is the core of the bull case. FactSet's estimated Q3 2026 earnings growth for the S&P 500 is 29.1%, and analysts expect earnings growth of 32% for calendar 2026. The growth also isn't limited to a few names: 14 of the 16 Zacks sectors are on track for earnings growth in Q3, which would be the eighth straight quarter of double-digit gains for the index. This isn’t a rally carried by a handful of names.

Seasonality

Midterm election years are usually rocky, as political uncertainty weighs on markets. Not this year. 2026 is off to the sixth-best start to a midterm year on record. Historically, when the S&P 500 is up 10% or more through the third quarter, the fourth quarter has delivered above-average returns. Strong years tend to finish strong.

Investors Aren’t Running for Cover

Stocks in the Utilities and Consumer Staples sector closed at their lowest level ever relative to the S&P 500. These defensive sectors are where investors hide when they expect a recession, and right now, even in a choppy market, nobody's hiding.

Higher Rates Reflect a Strong Economy

Some investors see higher yields as a reasonable response to an economy that is running hot by some measures, especially with tens of billions of dollars flowing into AI. A Fed tightening into a strong economy is a very different story from one reacting to weakness.

AI Boom remains well below dot-com extremes

Despite the run-up in tech stocks, today's valuations remain well below the extremes of the 2000 to 2001 dot-com era. Enthusiasm is high, but it's grounded in real earnings, not just promises.

The Bottom Line: Headlines move on fear, but markets move on fundamentals. Strong earnings, favorable seasonality, and an absence of defensive positioning all point in the same direction. As always, if you have questions about how your portfolio is positioned, we're here to talk.

If You’re Still Reading…

TJ got married in September. We had an unforgettable weekend and we’re still sore from the dance floor.