Morgan Stanley says 2 stats from earnings season paint a bullish picture for stocks next year

Core Insights - Wall Street is experiencing a solid earnings season, with strong sales and earnings per share (EPS) growth indicating a continuation of the bull market into next year [1][8] - Morgan Stanley's chief stock strategist highlights the importance of positive revenue surprises and EPS growth as key indicators of market strength [3][5] Sales and Earnings Growth - The sales growth rate of 2.3% is approximately double the typical rate of 1.1%, suggesting businesses are outperforming expectations in terms of sales [4] - The median companies in the Russell 3000 index achieved an 11% EPS growth, nearly double the second-quarter rate of 6%, indicating broad profit expansion across various sectors [5][6] Market Outlook - Analysts believe the current trends in sales and EPS growth support the view of a "rolling recovery" in earnings, with expectations for continued strength into 2026 [6][8] - The recent trade truce between the US and China has alleviated some trade tensions, which is seen as a positive development for the markets [7] Monetary Policy Considerations - There is uncertainty regarding interest rates, influenced by recent comments from Jerome Powell, which may affect the near-term monetary policy landscape [7][9]