The Case for Staying Bullish on Equities

Summary

Mike Wilson argues the recent stock correction was more significant than most realize and that earnings are accelerating. He raises the S&P 500 price target to 8,300 and recommends adding exposure to industrials, financials, and consumer discretionary during pullbacks. The rolling recovery, AI as a margin tailwind, and a broadening capex cycle support his bullish view.

• The S&P 500 correction earlier this year was deeper than headline indices suggest, with many stocks seeing 20%+ drawdowns.
• Earnings are accelerating with median S&P 500 surprise of 6% and revision breadth rising to 22%.
• Mike Wilson raised the 12-month S&P 500 price target to 8,300 based on higher earnings forecasts.
• The rolling recovery from the recession is still underappreciated and supports earnings growth.
• AI is more of a margin tailwind than a labor disruption, with enterprise adoption still early.
• Liquidity from the Fed is a near-term risk but the Fed has tools to address it.
• Investors should use corrections to add exposure to industrials, financials, and consumer discretionary.
• The biggest risk may be being too cautious after the market has already discounted risks.