Underlying market trend still deserves 'benefit of the doubt', says Truist's Keith Lerner

Market Overview - Markets are experiencing a comeback driven by cooler inflation data, with NASDAQ showing significant gains, particularly influenced by AI and major tech stocks like Micron [1] - The recent inflation report has been viewed positively, despite some concerns regarding data quality, indicating a potential disinflation trend in the economy [2][3] Economic Indicators - Key factors contributing to disinflation include oil, labor, and shelter, with shelter data in the CPI report being particularly encouraging [3] - The market has seen one of the largest six-month returns in history, with technology stocks rising approximately 70% from their lows [5] Market Trends - The NASDAQ has been fluctuating between 22,000 and 24,000, while the S&P 500 has been stuck between 6,500 and 6,900, indicating a period of consolidation [3][4] - Historical analysis suggests that following bull markets, gains are typically observed in the subsequent year, with seven instances since 1950 showing this trend [6] Earnings Outlook - Projections indicate that the S&P 500 could rise more than 10% by the end of next year, with a target of 7,850 [8] - Strong earnings growth is anticipated for the upcoming year, the best since 2021, with Q4 estimates showing positive trends [8][9] - There is an expectation of modest multiple expansion due to rising margins, contradicting the notion of multiple compression in the current market environment [10]