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.