Why the Bull Market Might Keep Rolling: Rate‑of‑Change Signals, Macro Trends, and the Road Ahead

When Lawrence Fuller first stepped onto the trading floor at Merrill Lynch back in 1993, the market was a very different beast. Fast‑forward three‑plus decades, he now runs Fuller Asset Management and oversees the Focused Growth portfolio on the Dub copy‑trading platform. His résumé reads like a cheat sheet for anyone trying to make sense of today’s equity environment.

In his latest note, Fuller points to a rather comforting number: the S&P 500’s forward price‑to‑earnings ratio sits at about 20.3×. That may not sound sexy, but it lines up neatly with the five‑ and ten‑year historical averages. In other words, the market isn’t wildly over‑valued; it’s simply where it’s been for a good stretch of time. For a seasoned investor, that’s a quiet nod to stability.

What’s more intriguing, Fuller says, is the way earnings growth is spreading beyond the familiar “Magnificent Seven.” Those tech‑heavy giants have dominated the headline reels for years, but now a broader swath of sectors – think industrials, consumer staples and even some mid‑cap innovators – are stepping up their profit forecasts. It’s a subtle shift, yet it hints at a healthier, more diversified engine under the rally.

From a macro perspective, the data looks surprisingly upbeat. Unemployment claims have been on a gentle decline, retail sales (excluding gasoline) are holding steady, and the dreaded inflation beast appears to be losing steam. Fuller isn’t saying the economy is flawless – far from it – but the trend lines are pointing north. He even dares a bold, forward‑looking statement: rate hikes are increasingly unlikely in 2026. In plain English, the Federal Reserve may have run out of steam for tightening, giving equities some breathing room.

Of course, no market analysis is complete without acknowledging the elephant in the room – geopolitics. Recent flare‑ups in the Middle East have kept oil prices elevated, nudging the average national gas price toward the $4 mark again. While higher energy costs can bite consumer wallets, the impact on the broader equity market has been relatively muted so far, thanks in part to the lingering strength in the underlying earnings trends.

Technology, however, remains a bit of a wild card. The Philadelphia Semiconductor Index, a bellwether for chips, recently completed a respectable pull‑back, and the broader tech sector has been whipsawing investors. Fuller notes that the “rout” in tech isn’t a full‑blown crash, but it does remind us that not every corner of the market is humming at the same pitch.

All of these pieces – a reasonable forward P/E, an expanding earnings base, softer macro headwinds and a less aggressive Fed – combine into what Fuller calls a “bull‑friendly rate‑of‑change environment.” In his view, the market’s momentum is still gathering steam, and the odds of a prolonged sideways or bearish phase are diminishing.

For the everyday investor, Fuller offers a practical takeaway: keep an eye on sectors that are beginning to show earnings acceleration outside the tech giants, stay vigilant about any sudden shifts in Fed messaging, and don’t let short‑term oil price spikes distract you from the larger earnings story. His own portfolio, the Focused Growth fund, reflects this balanced, yet optimistic, stance.

Finally, a quick housekeeping note – Fuller holds no positions in any of the companies mentioned and receives compensation only from Seeking Alpha. In other words, his analysis is meant to be a straightforward read, not a sales pitch.