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There’s no other way to say this: The U.S. stock market has been pricing in a strengthening U.S. economy. And Mr. Market has nailed it.

Since the U.S. economy bottomed at 1.2% year-over-year growth in the second quarter of 2016, the S&P 500 has rallied 22.5% (from July 2016 to the present). Even better, investors who bought growth stocks “are absolutely mercy crushing it,” says Hedgeye CEO Keith McCullough in the video excerpt above from The Macro Show.

Take a look at the year-to-date performance of the S&P 500 segmented into different style factors, like…

  • Top 25% of Sales Growth: +16.4%
  • Bottom 25% of EPS Growth: +1.2%

“It’s a pulverization of growth versus slow growth,” McCullough says.

Missed the move? We say the U.S. economy will continue to accelerate through early 2018, so growth should continue to outperform. The third quarter GDP reading, by our estimation, should come in particularly hot. Our estimate is for a reading of 2.58% year-over-year.

If you’re saying, “That’s nothing.” Hold on. On a quarter-over-quarter SAAR basis (how Wall Street economists misguidedly looks at GDP) our year-over-year estimate imputes to 4.23%.

That should definitely surprise stock market bears.