Remember when your friend bragged about their fantasy football team’s “advanced metrics”? Well, Wall Street has its own version of that, except instead of predicting touchdowns, they’re trying to figure out if stocks will keep going up. And right now, Morgan Stanley’s Michael Wilson is basically doing a victory dance over two numbers that have him more excited than a kid on Christmas morning.
Here’s the deal: We’re wrapping up earnings season (that quarterly ritual where companies tell us how much money they made or lost), and Wilson spotted something that’s got him bullish on stocks heading into 2026. It’s not some complicated algorithm or mystical chart pattern – it’s actually pretty straightforward.
The Two Magic Numbers
First up: companies are beating their sales expectations at twice the normal rate. Think of it like this – if Wall Street analysts are the overly pessimistic friend who always expects the worst, companies just proved them wrong… a lot. Sales growth hit 2.3%, which might sound boring until you realize that’s double the usual 1.1%. It’s like expecting your paycheck to be $50 and getting $100 instead.
Second: the median stock (that’s the middle-of-the-pack company, not the flashy tech giants) saw earnings per share grow 11%. That’s nearly double what they managed last quarter. Wilson calls this the “rolling recovery,” which sounds like a yoga move but actually means profits are spreading beyond just the usual suspects in Big Tech.
Why This Actually Matters
While everyone’s been obsessing over whether AI will take over the world (spoiler: probably not next Tuesday), Wilson’s been watching something more important: regular companies making more money. When the median stock – your everyday, not-particularly-sexy businesses – starts printing cash, that’s when you know the party might be getting started for real.
“We think this is an underappreciated story,” Wilson wrote, which is Wall Street speak for “everyone’s missing the obvious thing right in front of them.” He’s betting this trend continues into 2026, meaning we might see profits grow across all kinds of companies, not just the ones with “AI” in their press releases.
The Plot Twists
Of course, because this is finance and nothing’s ever simple, there are some wildcards. The US and China apparently called a trade truce last week (Wilson says it “largely diffused” tensions), which is good news for anyone who likes their supply chains functioning normally.
But then there’s Jerome Powell and the Fed, who are basically the parents at this market party, deciding whether to keep the music playing or turn on the lights. Wilson thinks they’ll stay accommodative – fancy talk for “keep the good times rolling” – but admits nobody really knows what they’ll do next.
The Bottom Line
Sometimes the best investment insights aren’t hidden in complex models or whispered in exclusive clubs. Sometimes it’s just noticing that a bunch of regular companies are quietly making more money than expected. Wilson’s betting that this “rolling recovery” has legs, and honestly? When the median stock is crushing it, that’s usually a pretty good sign for everyone else.
Just don’t tell your fantasy football friend that Wall Street’s “advanced metrics” are actually working better than theirs.