This Week in Review | Bull Market Birthday, Q3 Earnings, US Inflation (Oct. 16, 2026)

The episode begins by marking the current bull market's fourth birthday on Monday, October 16, 2026. The hosts emphasize that bull markets don't die from old age alone—while the average bull market lasts around five years, the record holder (2009-2020) lasted over twice as long. They recommend staying bullish absent compelling bearish reasons and watching for actual risks rather than age-related concerns.

The second key point addresses historical investor behavior: investors tend to focus on what caused the last downturn. Inflation was the dominant fear during the 2022 bear market, and despite current inflation being well below the mid-2022 peak of 9%, this memory remains fresh. The hosts view this lingering fear as part of the "wall of worry" that bull markets typically climb, which can actually help support positive surprises that fuel market gains. They also note that bull markets, while resilient, are not calm—citing February's Middle East conflict-driven 10% global stock decline and subsequent recovery as a normal part of investing.

For Q3 2026 earnings season, analysts expect S&P 500 earnings to grow 29.6% year-over-year, which would be the third consecutive quarter above 25%. Early results from financial firms are mixed, with some beating expectations and others falling short in certain areas, though they've sounded more optimistic about the months ahead. Earnings calls have highlighted AI-related opportunities and operational advantages alongside risks from rogue agents. The hosts stress that individual company results matter less than whether broad market profits continue growing and beating expectations. They note that since the bull market began in October 2022, stock rises have partly depended on investor expectations for profit recovery, which have recently materialized. However, they flag rising tech sector optimism as worth monitoring—investor expectations for tech sales growth now exceed industry estimates, suggesting positive surprises may be harder to achieve for tech stocks going forward.

Regarding September inflation, the CPI came in hotter than expected at 3.7% year-over-year (up from 3.4% in August and above the 3.6% forecast), but core CPI remained modest at 2.6%. The hosts emphasize that the acceleration appears concentrated in energy costs tied to the Middle East conflict rather than broadly spread across the economy. The Fed's preferred PCE measure shows similar patterns, with core PCE holding steady at 3% since June. They argue that for stock markets, the key metric is how reality compares with expectations—and this reading, while hot, is actually below many consumers' expectations. They note that global money supply growth, while recently accelerated, remains moderate, suggesting energy-related pressures should fade rather than spread into broader inflation.