Andy Constan, CEO of Damped Spring Advisors, presented a detailed bull case for equities in the fourth quarter on X on Saturday, October 17, 2026. Despite holding a short position in equities and a long position in bonds, Constan outlined a series of factors that could drive stock market gains, stating, "I'll break it down into reasons to be bullish equities. 1. Earnings, earnings, earnings. They are accruing at the SPX level at 30% ish annualized. They will beat expectations over the next 5 weeks 2. Valuations could easily richen though are pretty rich 3. Long term interest rates could have topped 4. The Fed has things handled and won't be forced to tighten 5. after a) the election the president will end the war and bring oil prices down b) The Congress is and will be in gridlock which will keep fiscal humming but not overheat c) election uncertainty will dissipate 6. when equities are high going into year end. Winners are chased by those underperforming at the same time as those who are outperforming refuse to sell winners due to capital gains tax realization (Broadly defined causal Santa Claus rally) 7. Bessent could reduce duration issuance and support assets 8. Circular financing by all (NVDA in particular) will offset any supply or issuance that has been a headwind to compute investment 9. Reflexive consumption/dissaving due to asset price increases could drive above trend real growth and support stocks over bonds 10. It's possible that Hedge funds will/have been flushed out of positions and positioning is too bearish I'm sure there are more bullish cases but these are some of mine. I am not bullish as I don't think the above is a good case but it exists for sure".
Recent Gokhshtein Media coverage indicates a prevailing concern about inflation impacting market conditions. Mohamed El-Erian has warned that persistent inflation poses a risk to growth and reinforced the inflation message following strong US data. Lyn Alden noted that bond market yields remain high due to this persistent inflation. The Crypto Fear & Greed Index currently sits at 55, indicating 'Greed' in the digital asset market, but general market sentiment around equities has been cautious with the S&P 500 down 1.1% today.
Constan's analysis implies that investors should consider these potential bullish catalysts, even if they hold a bearish personal view. His points suggest a focus on corporate earnings performance, potential shifts in interest rate trajectories, and post-election policy stability as key drivers. He also highlights year-end market dynamics, such as the Santa Claus rally effect, and the possibility of a market flush-out of bearish positioning as factors to monitor for a potential upside in equities.
