Forget Wall Street’s complex models, and consider the simple logic powering stock investors right now.

The Federal Reserve’s projected easing cycle looks poised to kick in against a backdrop of billions in cash on the sidelines, low volatility and a real economy on an even keel. All are signposts that the bull run still has juice.

With trade fears dimming for now, equities still look appealing as the return offered by Treasuries declines and a steady corporate bond market boosts confidence in the outlook for earnings. Even after stocks hit multiple records in recent weeks, the S&P 500’s earnings yield remains well above its average versus that of 10-year Treasuries.

Throw in positioning data that shows investors have ample room to up their allocations, and the bull case grows stronger.

“Right now the Fed is cutting when growth prospects are nowhere near weak and Fed funds is close to neutral,” Tom Porcelli, chief U.S. economist at RBC Capital Markets, wrote in a recent note. “Risk assets should absolutely love this setup.”

Assuming easier policy does come, it will be at a potentially propitious time for equities. Retail sales figures last week beat forecasts, adding to positive surprises of late. For Neil Dutta, head of economics at Renaissance Macro Research, it’s a sign estimates are out of step and will need to be revised higher.

“Imagine that,” he wrote in a note to clients. “The Fed is cutting as growth and earnings estimates turn up. Cyclicals anyone?”

Even as the U.S. central bank seeks to enact a preemptive rate cut, there are few worries about the economic outlook on display in the credit market. The cost to insure high-grade debt against default for five years remains near the lowest in more than a year.

The Bank of America survey, for one, shows that more investors are making peace with the rally. Money managers said they added risk in July, rotating into the likes of industrials and banks.

Meanwhile, the Cboe Volatility Index, a measure of U.S. stock volatility known as the VIX, remains below one- and five-year averages. And traders remain net short futures on the gauge as they bet price swings will remain subdued.

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