THE BULL CASE

With this mornings GDP release, a revision to 2.9% from 2.5% for 2nd quarter growth, the bulls have strengthened their case. Nothing stops the resilient U.S. economy from chugging along at it's potential of about 3 %, and along with it, corporate profits and stocks.

A weaker housing market, well it's only 6-7% of the economy anyway. Weaker year over year auto sales, well we are really a service oriented economy now anyway. The industrial side has shriveled to about 15% and autos are a fraction of that. Higher interest rates, the Fed has paused and the interest rate cycle has peaked, and bond yields are falling. In addition, that bugaboo, oil prices, have also peaked and are falling, now below $70, adding support to consumer spending.

A potential Democratic victory, taking the House and Senate, well that's too far away to worry about. Inflation worries, the Fed has told us it will moderate as the year progresses, not to worry. A soft landing is in the cards, haven't you heard. That's why the market as acted so well even in the face of bad news, and the latest GDP proves it.

In addition, we have valuations at levels not seen in years, robust corporate share buybacks, and M&A activity being propelled by bigger and bigger pools of private equity. WMT sales were at the high end of forecasts, last months retail sales were better than expected and auto sales were over 17 million units.

Technically, we are breaking out to new highs, and sentiment as a contrary indicator is as bearish as we've seen in sometime, close to where we have seen big rallies in the past.

So if I were a bull I'd say, put that in your pipe and smoke it.