Dear subscriber,
Welcome to the first trading day of the new year!
It’s a Friday. A lot of people are still in vacation mode. Volume will probably be light. But don’t let that fool you — what happens over the next few weeks will set the tone for the entire year ahead.
And I want to start this year with a very simple message:
I am optimistic.
Not because I think the market will go straight up every day. It never does. But because the big forces that drive long-term stock prices are still firmly on our side.
Here are a few of the biggest reasons why.
U.S. Economy is Still Growing
People are working, consumers continue to spend money, and companies are making money. That’s what really matters. As long as businesses are growing their revenues and profits, stocks have a strong foundation to keep moving higher over time.
Interest Rates Are No Longer the Enemy
We just came through one of the most aggressive rate-hiking cycles in decades, and now that pressure has eased. When rates stop rising — and especially when they start to fall — it is historically very good for stocks. It makes borrowing cheaper, it helps corporate profits, and it pushes more money out of cash and into the market.
Generational Shift in Innovation
We are in the middle of once-in-a-generation innovation shift. Artificial intelligence, robotics, energy modernization, digital infrastructure, and healthcare innovation are not hype stories — they are real, massive trends that will drive trillions of dollars of investment over the next decade. The companies leading these revolutions are still early in their growth curves, which is exactly where long-term investors want to be.
Good Financial Shape
Companies are in good financial shape. Many large and mid-sized companies have strong balance sheets, lots of cash, and the ability to invest in growth even if the economy slows a bit. That gives the market stability underneath it.
Investor Sentiment is Still Cautious
Believe it or not, that’s bullish. When everyone is already excited, the rally is usually closer to the end. When people are still nervous, there is a lot of money sitting on the sidelines waiting to come back into the market.
That’s why I believe this bull market still has room to run.
There will be ups and downs. There always are. But the long-term trend remains higher, and our job is to stay disciplined, stay invested in the right opportunities, and let time and innovation work in our favor.
I’m excited to kick off another year with you — and I think it’s going to be a very good one.
Talk soon,
Matt McCall
Founder, NXT Wave Research
