5 Reasons to be Bullish Stocks in Q4

Market Overview - U.S. stocks have shown resilience, climbing despite various concerns such as the presidential election, inflation, and geopolitical tensions, with the S&P 500 Index up 22% and Nasdaq up 23% in 2024, marking the best start in a presidential election year [1] Big Tech Performance - Big tech companies like Meta Platforms, Arm Holdings, and Alphabet are expected to continue their strong performance into 2025, supported by robust forward EPS expectations, with several holding a Zacks Rank 2 (Strong Buy) [2] - Nvidia, a key player in AI, is projected to more than double its EPS for the full year 2025, indicating strong growth potential [3] Tesla Insights - Tesla reported a 25% growth forecast for auto sales in 2025, exceeding estimates of 16%, despite a 17% decline in regulatory credit revenue quarter-over-quarter, showcasing improved cost management [3] Investor Sentiment - Significant call option activity in big tech stocks like META and AAPL suggests strong investor confidence, as these companies are critical to the growth of industries like AI [4] - The relative positioning of U.S. equities remains underweight compared to previous presidential election cycles, indicating potential for further upside if investor sentiment improves [7] Seasonal Trends - Historical data indicates that November, December, and January are typically strong months for the market, with November being positive in eleven of the past twelve years, suggesting favorable conditions for bulls [5] Risk-on Market Dynamics - Risk-on sectors are performing well, with MicroStrategy significantly outperforming the S&P 500 year-to-date, while risk-off sectors like energy have faced declines amid easing geopolitical tensions [9]