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Legend has it that Marco Polo once stood in the court of Kublai Khan and watched the night sky explode.
Fire arrows streaked through the darkness. Explosions cracked across the palace grounds. Strange devices skittered along the floor, spitting sparks in every direction.
To a European traveler in the 13th century, it must have looked like magic.
Historians still debate how much of that story is true. But we do know the Chinese had been using early fireworks for centuries by then, first by tossing bamboo into fires and later by packing gunpowder into paper tubes.
Americans may have gotten their fill of fireworks over the Fourth of July. But folks, judging by the earnings growth expected in the months ahead, Wall Street may have an even more spectacular show in store.
Now, I know it may not feel that way after the market’s recent gyrations. Iran-related headlines have unsettled investors, while sharp swings in AI and data center stocks have made the ride feel especially queasy at times.
But take a step back and look at the bigger picture.
Investors enjoyed strong gains in the first half of the year. The U.S. economy remains resilient. Artificial intelligence investments continue to expand. And most importantly, we are entering what could be one of the strongest earnings environments I can remember.
So, do not let a few bumpy trading days scare you away from the opportunity in front of us. Earnings season has only just begun, and the results could be even better than Wall Street currently expects.
In today’s Market 360, I’ll explain why the foundation beneath this market remains solid, why corporate earnings are poised to deliver plenty of fireworks and how my Precursor Intelligence system can help identify the market’s next earnings leaders before their strength becomes obvious to Wall Street.
The Foundation for a Strong Second Half
The U.S. has emerged as a true economic oasis.
GDP grew at a 2.1% annual pace in the first quarter. Growth cooled a bit in the second quarter, but it is set to reaccelerate in the second half of 2026. Personally, I expect U.S. GDP growth to hit at least a 5% annual pace in the third quarter.
Add anticipated AI productivity gains to that outlook, and it is easy to see why the U.S. economy could continue to accelerate through year-end.
That strength is already showing up in the stock market.
The second quarter was the best-performing quarter for the NASDAQ and S&P 500 in six years. The S&P 500 rallied 15%, the Dow climbed 13% and the NASDAQ surged 21%. The small-cap Russell 2000 also jumped about 21%.
I believe this is the best market environment we have seen since 1999.
Back then, the internet buildout unleashed a wave of business investment, productivity growth and corporate profits.
Today, artificial intelligence is creating a similar opportunity. Companies are pouring money into AI infrastructure, data centers and the technology needed to power them. Estimates say tech companies will spend around $750 billion on the AI buildout just this year alone.
And aside from the buildout itself, the resulting productivity gains could provide another major boost to economic growth.
In fact, I believe the current AI boom could ultimately be even more powerful than the internet boom of the 1990s.
I know the market’s recent gyrations have made that opportunity easy to overlook. But a few bad days do not change the bigger picture…
Economic growth is poised to reaccelerate. The AI buildout is still gathering momentum. And most importantly, corporate profits are accelerating.
That is why the foundation beneath this market remains solid.
And it brings us to the fireworks show investors should be watching now: earnings season.
The Next Fireworks Show Is Just Beginning
The first-quarter earnings season had its share of fireworks – but the second quarter will be even more impressive.
Consider this… Analysts expected the S&P 500 to post average earnings growth of 13% at the end of the first quarter.
The final result? 28.6%, as wave after wave of positive earnings surprises drove results well above expectations.
We will likely see the same thing play out again in the second quarter.
Analysts expect S&P 500 earnings to grow 24.7%, according to FactSet.
And if analysts are underestimating results again, we could be looking at 30% earnings growth by the time it’s all said and done.
That is especially encouraging for fundamentally superior stocks. When companies beat estimates and raise guidance, Wall Street is forced to revise its outlook, and institutional money tends to follow. That can send the strongest stocks sharply higher.
So please – pinch yourself. You are not dreaming. The opportunity is real, folks.
It is time to grow and prosper, so let’s talk about how to find the stocks most likely to benefit.
How to Spot the Next Earnings Leaders Early
Now, I want to make one thing clear. I’m on a mission from God to help you get rich.
I do not say that lightly. That is why I focus on the companies showing the earliest signs of accelerating sales, earnings and buying pressure.
With earnings growth expected to strengthen through the rest of the year, those stocks could lead the market’s next major move.
The challenge, of course, is identifying those companies before their strength becomes obvious to the rest of Wall Street.
A blockbuster earnings report rarely comes out of nowhere. The underlying business often begins improving well before that growth appears in the headline results.
And that is exactly why I designed my Precursor Intelligence system: to track the early fundamental and institutional signals that often appear before stronger earnings, raised guidance and a major move in the stock.
The goal is not to chase a stock after it has already delivered spectacular results and captured Wall Street’s attention. It is to identify potential earnings leaders while their growth stories are still taking shape.
That distinction could be especially important in the months ahead. A strong earnings environment can lift the broader market, but the biggest gains tend to come from companies whose fundamentals are improving the fastest.
Precursor Intelligence helps me focus on those opportunities and separate companies with genuine earnings momentum from stocks that are simply riding the market’s enthusiasm.
That is the edge I broke down in my recent special presentation. I also revealed my No. 1 stock to buy now, along with one stock I believe investors should avoid.
With the earnings fireworks already underway, I strongly encourage you to watch the presentation now. You will see how P.I. can help identify potential earnings leaders before the next wave of results puts them on the rest of Wall Street’s radar.
Sincerely,
Louis Navellier
Editor, Market 360
P.S. The Precursor Intelligence system I told you about is about to get even better…
I’ve been thinking a lot lately about how regular investors like you can use it the way I do – not just to look up individual tickers, but to search for broader patterns.
Which sectors are seeing the most upgrades? Which stocks are showing improving grades over time? Where is institutional money quietly moving? In a sense, I’ve been asking the system these questions for decades – and it has helped point me toward the strongest opportunities.
I think we’re close to something that will fundamentally change the way you interact with it – making it more intuitive, more powerful and more personal to your own portfolio.
Stay tuned…
