The bull market in stocks is in its seventh year. And if it can stick it out through the end of the month, it will have been the second longest bull market in U.S. history.

But there are a lot of reasons to be nervous if you’re long in the stock market. On Friday, Goldman Sachs’ David Kostin warned clients that “near-term risk is skewed to the downside,” largely due to the bad news surrounding earnings season.

Then again, when it comes to risk, it’s always something.

A bull emerges

Sean Darby, Jefferies’ Chief Global Equity Strategist, isn’t fazed by what’s expected to be a particularly awful earnings season.

“A combination of improving earnings upgrades, repressed global long-term bond yields and a squeeze on equity supply is likely to mean that U.S. equities will outperform its peer group,” Darby said on Monday. “We upgrade to bullish.”

Darby has a 2,180 price target for the S&P 500 (^GSPC). The index closed Monday at 2,041.

The year started with a lot of uncertainty in the economy. Stock prices wobbled, oil prices tumbled, and measures of economic activity deteriorated all over the world.

But the bad news didn’t last too long. In recent weeks, we got economic data that signaled growth was picking up at the end of Q1. This was likely aided by favorable financial conditions.

“With real interest rates negative and the dollar’s annualized appreciation abating, U.S. monetary conditions are loosening,” Darby added. “While U.S. economic surprises have surged, independent macro indicators have also rebounded sharply, suggesting investors have underestimated the strength of the economy.”

What about that earnings recession?

Corporate earnings have been particularly weak in recent quarters. In fact, earnings have been in a full-blown recession. And this is a big deal, since earnings are the most important driver of stock prices.

But stocks are also driven by expectations for the future, not the past.

“We continue to highlight that the S&P 500 earnings recession was last year,” Darby said. “The U.S. economic surprise has improved sharply, while at the same time the dollar has rolled over. Analysts are beginning to revise up their numbers.”

Darby isn’t alone in his assessment that the bad news is largely behind us.

“With the big fall in oil and big dollar appreciation behind us and with manufacturing ISM rebounding, there are good reasons to believe that the slowdown in S&P 500 earnings is temporary and we should over the coming quarters see a rebound is overall earnings,” Deutsche Bank’s Torsten Slok said in an email on Sunday. “So yes, earnings have been slowing, but given the turnaround in oil and the dollar, earnings are likely to accelerate again over the coming quarters.”

Investors are then faced with two challenges: 1) accept that the past is the past, and 2) decide whether or not the future looks better.

“The bottom line is that U.S. equities have a number of favorable tailwinds that should underwrite earnings,” Darby said. “Estimates appear to be backward-looking.”

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Sam Ro is managing editor at Yahoo Finance

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