One market strategist says earnings are continuing to power recent gains in equity markets. 

Ryan Detrick, a chief market strategist at Carson Group, said in an interview with BNN Bloomberg on Tuesday that he thinks we are in the midst of a bull market in Canada and the U.S., which is expected to continue. He said that stock market gains in the U.S. are occurring alongside “record earnings.” 

“We've seen S&P 500 (Index) 12-month guidance (and) 12-month estimates up about 2.5 per cent since last March…Look at all of 2019 (where) S&P 500 earnings are up only two per cent,” he said. 

“So we are seeing some explosive earnings, which justify in our opinion, this bull market.” 

Since the S&P 500 Index “bottomed in October 2022,” Detrick said the current bull market is around 19 months old. He added that he analyzed 12 bull markets that occurred since the Second World War, finding the average lasted about five years. 

“This bull market in our opinion is still very young with strong earnings, with strong profit margins and strong investment still taking place,” Detrick said. 

Detrick’s comments come following gains in both Canadian and U.S. equity markets. 

The S&P 500 Index hit a record high for the twenty-fourth time this year ahead of Nvidia Corp.’s earnings. 

Last week, the Dow Jones Industrial Average broke record highs surpassing 40,000 for the first time. Earlier this month, the S&P/TSX Composite Index reached a record high closing at 22,375.83 and finished trading at 22,468.16 on Tuesday. 

Beyond earnings, Detrick said inflation is starting to move closer to the U.S. Federal Reserve’s two per cent target. 

He said he predicts inflation to “come back drastically” in the second half of the year and that while shelter and rent prices have been stubbornly high, they are starting to show signs of improvement. 

“It means the Fed likely can cut in September. Likely cut in November. Just two cuts, more surgical if you will,” Detrick said. 

With files from Bloomberg News and the Canadian Press.