I recently came across a research report from a well-known investment bank, and it's quite interesting. They have raised their forecast for S&P 500 earnings growth in Q4 next year from the market consensus of 9% all the way up to 15%, a full 5.5 percentage points higher.

Why are they so optimistic? The report's logic is as follows: the growth momentum in Q3 was not only strong but also widespread—the sectors involved are diverse. This enthusiasm is expected to carry over into Q4. Supporting factors include a relatively good macro environment, signs of a weakening dollar, continued strength from tech companies, and other sectors starting to follow suit.

One of the most telling data points is sector coverage. They expect 9 out of 11 major sectors to achieve positive growth in Q4. To put it in perspective—only 6 sectors did so in Q3, and just 2 in Q2. This indicates that the foundation for earnings growth is indeed broadening, not relying on a single sector.

The 5.5% upside surprise doesn't seem particularly outrageous, but it is higher than the historical average of 4.9%. The companies that have already reported earnings are performing quite well, confirming the optimistic outlook of this report.

Interestingly, the same investment bank also provided a more aggressive target—by the end of 2026, the S&P 500 could reach 8,000 points. Such bold predictions are rare on Wall Street.