Forecasting a Bull Market as Real Rates Fall

For the most part, I limit my forecasts to "now is better than the past and the future will be better than now." Rather uncharacteristically, I'm going to forecast a bull market over the next 6 to 18 months.
There's a simple reason for this. Higher interest rates mean a drop in the net present value of earnings. Between mid-November of 2021 and late October of 2023, real interest rates rose from -0.38% to +2.55%. That's a massive shift in discount rate. The NASDAQ fell 21% during this time to reflect the drop in the value of future earnings.

As inflation abates and the labor market shows signs of easing, real interest rates have fallen, from 2.55% to 2.24% in just the last month. The NASDAQ is up 11% in that time.
Real interest rates will continue to fall over the next 6 to 18 months. This will raise the value of future earnings and with it, stock prices.

Top and Bottom 10 Counties by Average Income - How the Richest Counties Vote and How the Poorest Counties Have Fared in the Last Year

Now that the pandemic is over and the world has gone back to real world interactions, New York County has again taken the top spot for average income, surpassing Silicon Valley counties.

So many fascinating things to tease out from the data in these 2 tables but I'll focus on just two.

One, across the US, the ratio of Biden voters to Trump voters was 1.1. Within the ten counties that make the highest income, that ratio was 3.7. The average voter in the richest county was nearly 4X more likely to vote for Biden. Within the ten counties with the lowest income, that ratio was 0.8. Communities that struggle to succeed generally think that Trump's policies make sense. Communities that are thriving dismiss the notion that Trump's policies make any sense.
Two, in the last year, the poorest counties have done better than the wealthy counties. Across the country, average wages are up 6.6%. In the 10 richest counties, wages rose only 3.4%. In the 10 poorest counties, wages rose by 8.2%.

To recap, richer counties don't take Trump or his policies seriously. Poorer counties are doing better under Biden than are richer counties. Biden promised to help the working poor; it seems like that's happening.

data source:

https://www.bls.gov/news.release/cewqtr.t01.htm