Welcome to my video presentation for Friday, August 4, in which I analyze the latest news and trends driving the markets. The article below is a condensed transcript; see my video for additional details and several charts.

Just as you can find patterns in nature, you can find patterns in the markets. Let’s look at a stock market pattern that’s particularly relevant now: the tendency of stocks to perform well in the third year of a presidential cycle.

Presidents typically do the tough work in their first and second years in office and then lay the groundwork for their reelection in the fourth year by pushing policies in the third year that are beneficial for the economy and financial markets.

History shows that Americans usually vote their pocketbook. Simply put, if perception at election time is the economy is improving, odds favor the party already in power.

Since 1928, the third year of the presidential cycle has generated positive S&P 500 returns 78% of the time, producing average returns of 13.5% versus an all-year average of 7.7%.

The presidential cycle isn’t the only pillar shoring up the bull market.

After the closing bell Thursday, two mega-cap tech giants that are economic bellwethers, Apple (NSDQ: AAPL) and Amazon (NSDQ: AMZN), provided quarterly operating results. Apple’s results were mixed, whereas Amazon blew the doors off expectations.

Apple reported fiscal third-quarter results that beat consensus expectations for both earnings and revenue, driven by stronger services revenue that grew year-over-year by 8%. However, overall revenue still fell 1% compared to the same quarter a year ago, and revenue in the company’s iPhone, Mac, and iPad lines were all down from a year earlier.

Apple’s earnings per share (EPS) came in at $1.26 versus $1.19 estimated; revenue reached $81.8 billion vs. $81.6 billion estimated. The Cupertino giant didn’t provide official guidance. It stopped providing guidance in 2020, due to pandemic-induced uncertainty.

Amazon reported second-quarter earnings that crushed analysts’ estimates and issued guidance for healthy revenue growth. EPS came in at 65 cents vs. 35 cents expected; revenue was $134.4 billion vs. $131.5 billion expected.

Amazon Web Services generated $5.4 billion in operating income, which is down 5% year over year but higher than the consensus estimate of $5.2 billion.

The numbers represented Amazon’s biggest earnings beat since fourth quarter 2020. For the third quarter, Amazon projected revenue of between $138 billion and $143 billion, for growth of between 9% and 13%.

As evidenced by Amazon’s blockbuster results Thursday, an increasing number of companies are beating Q2 earnings expectations. So far, about 80% of S&P 500 companies have exceeded earnings estimates.

Wall Street expects a return to profit growth for S&P 500 companies as a whole in the next two quarters. In 2023 for Q3 and Q4, analysts are projecting earnings growth of 0.1% and 7.6%, respectively, according to research firm FactSet. For all of calendar year 2023, analysts expect earnings growth of 0.6%.

Of course, market rallies often are driven by a fair amount of hype. For example, a recent FactSet survey found that conference calls on first quarter earnings results by S&P 500 companies reflected a surge in the use of the term “AI” (artificial intelligence) and a sharp decline in the use of “ESG” (environmental, social and governance factors).

FactSet found the highest number of S&P 500 companies citing “AI” on Q1 earnings calls in over 10 years. But AI is no fad; it’s a profound technological advancement of lasting proportions.

The upshot: underlying conditions remain bullish.

Corporate balance sheets are healthy, inflation is dramatically falling around the world, and the Federal Reserve is nearing the end of monetary tightening.

The surprisingly resilient (but not overheated) U.S. economy is another pillar shoring up the bull market.

The Bureau of Labor Statistics reported on Friday that the U.S. economy added a solid 187,000 jobs in July. That’s slightly below expectations of 200,000 new jobs, but still a sign the economy remains in strong shape. The unemployment rate dipped from 3.6% to 3.5%, a half century low (it was forecast to hold steady at 3.6%). Wage growth increased 4.4% year over year, above 3% inflation.

A “piggyback” profit play…

I’ve just laid out the bull case. But maybe you’re tired of overpaying for bloated stocks. My colleague Jim Pearce has unearthed a “piggyback” profit play that lets you tap into the growth trajectory of Wall Street’s top stocks, without actually buying them.

Jim Pearce is chief investment strategist of our flagship publication, Personal Finance. Jim has pinpointed an under-the-radar company that tech giants such as Apple and Amazon can’t live without.

This piggyback play is deeply entrenched in the artificial intelligence market (size: $2 trillion by 2030)…electric vehicles ($693 billion by 2030)… and cloud computing ($2.3 trillion by 2032).

The time to buy this stock is now, before the rest of the investment herd finds out and sends its share price into the stratosphere. To learn the details, click here now.

John Persinos is the editorial director of Investing Daily.

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This article originally appeared on Investing Daily.