Music Is Still Playing (Free Post)

I’ve said it before but it’s worth repeating… Im a realist and pragmatist, not a doomsayer. That stretch earlier in the year around “Liberation Day” (March–June) was the perfect example. Everyone was caught up in skepticism and cynicism, blurring politics with markets, and it created this huge mispricing. The “Left Tail” (downside fear) got completely overpriced while the “Right Tail” (upside potential) in US equities was left wide open. That imbalance ended up self-fulfilling into one of the more ironic rallies we’ve seen a march to record highs in the face of nonstop bearish chatter.

Fast forward to now, and the bull case for equities is pretty clear if you step back:

The Fed has effectively pivoted. They’ve shifted the emphasis of their mandate back toward growth and labor, away from being singularly obsessed with inflation. Slower hiring, but not outright layoffs, has given them the space to lean dovish without panicking the market. That’s been the first leg of support.

On top of that, fiscal is still wide open. Government spending remains stimulative both in the US and abroad, keeping the macro backdrop supportive even as monetary policy eases back a touch.

The consumer story is alive and well too, but it’s skewed. The high-end household is as wealthy and cash-flush as ever, and they’re carrying the load. That segment is doing the “heavy lifting” for consumption, and it shows up in everything from luxury goods to travel.

Financial conditions? About as easy as you could ask for. The dollar is weaker, securities portfolios are near highs, credit spreads are razor-tight, vol has been crushed, and there’s cash everywhere. Liquidity is not a problem, it’s fuel.

Then there’s nominal GDP, which matters more than people realize. Corporates live and die by it, and it’s still running at ~5%+, supported by a historically low unemployment rate. That’s a powerful tailwind for revenues and earnings.

And earnings themselves have been nothing short of resilient. The AI-driven halo effect in mega-cap tech continues to dominate index performance, sentiment, and flows. These companies are generating cashflow at a scale that not only funds massive CapEx but also underwrites buybacks, the ultimate equity demand machine.

So when I put it all together, the bull case isn’t about “hope” or “storytelling.” It’s right there in the data: dovish Fed, fiscal impulse, wealthy consumer, easy financial conditions, robust nominal growth, and resilient earnings. That’s why equities still have plenty of ammunition, no matter how loud the doom chorus gets.

As they say stop when the music stops… (tip: it hasnt)