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Gravity-Defying Market Finds Rationale in Bullish Profit Views

  • Analysts have increased their 2021 EPS forecast for 10 weeks
  • Citigroup panic/euphoria index jumps to an all-time high
A vehicle delivers the "2021" New Year's Eve numerals in the Times Square. Photographer Michael Nagle/Bloomberg
Photographer: Michael Nagle/Bloomberg
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A stock market sustained by little more than hope all year is getting evidence 2021 will bring more tangible support, lifting it above an assortment of dramas.

Optimism is being fueled by developments that, while occurring largely out of sight, form an increasingly durable bull case for equities, particularly with respect to a corporate recovery in 2021. While Federal Reserve stimulus, vaccines and small-investor enthusiasm remain central to the picture, signs of strength in next year’s profit outlook are now perhaps a larger factor putting a floor under equities.