Fears of a recession bottomed out in late August and early September, and consumers and investors are beginning to feel better about the future of the economy and the markets, said Alex Ely, chief investment officer for the small-cap/mid-cap growth team at Macquarie Investment Management, a global financial firm.

Large-cap firms do well when people are nervous, but small and mid-cap companies do well when investors feel a sense of confidence in the future, Ely said.

On the other hand, large-cap companies will see slow growth next year, he added. “It is sort of a tale of two markets, and that confuses some people,” he said.

“We are excited about the future,” he added. “There will be jitters around the presidential election, but we see an upward slope for the economy for years to come. This is a great time to be a growth investor. There is still a lot of negativity out there [in pundits’ predictions], but there are a handful of us in the bull camp.

“Consumers are regaining confidence because things have not gotten any worse” since late summer, he said. “People are feeling better about their ability to get another job if they lose the one they have.”

Some outside factors have the potential of impacting the markets. One is the continuing back-and-forth about tariffs.

“But I think we will see at least a first-stage deal between the U.S. and China in the near future. President Trump wants the economy to be as stable as possible going into the election, and China is getting pressure from the people to promote stability,” which will lead to at least a first-step deal, he said.

Also on the positive side is the fact that innovators are finding better, cheaper, faster ways of doing things, which provides a big boost for the economy. “These are not just one-offs. The changes are going to continue year after year. As an example, Apple Pay transactions were up 100% year-to-date,” Ely said.

He also predicted a good holiday shopping season, which will further boost the economy.