How is credit considered "bullish" for large cap stocks?

Question

Do you really think this is true, how so?

Answer 1

Do you mean a company's ability to borrow on credit?

If so, large-cap companies (and many small-caps too) often make more money on borrowed money than it costs them in interest.  They certainly believe they can, otherwise there's no point in borrowing the $ in the first place.

There's of course exceptions due to bad management & planning, but for the most part easily available credit can increase corporate earnings growth.

For example - a company is expanding orders for their widgets and wants to build a new factory.  They'd need to borrow $100 million to build it, and it would increase their sales $15 million/year.  (15% return).  They can borrow at 5% interest/year.  ($5 million)  It makes sense for them to borrow.  If no bank will lend to them, they won't see that earnings growth.