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The '3 R’s' that could goose the bull's grades

School's back in session. Wall Street's back to work, too. LPL Financial has outlined the three R's (no, not reading, 'riting or 'rithmetic) that could propel the bull market to even greater heights.

LPL's talking about: "Revenues," as in corporate revenues."Reinvestment," as in reinvestment of capital. "Renaissance," as in manufacturing renaissance.

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"These three R's are all key components in evaluating the opportunity for further stock market gains," LPL's chief investment officer Burt White and strategist Jeffrey Buchbinder said in a research note.

Mustafa Hassona | Anadolu Agency | Getty Images

The broad U.S. stock market, as measured by the Standard& Poor's 500-stock index, enters today's trading session up 8% this year.It's down 0.6% from its Sept. 5th record closing high of 2007.71.

The investment thesis is straightforward. Earnings, they say, are the key driver of stock prices. The recent strong reading on August manufacturing suggests corporate earnings will continue to improve in the second half of 2014. It also suggests "that the current economic cycle is closer to its middle than its end." Translation: Don't count on a recession anytime soon.

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There are also factors likely to boost the amount U.S.corporations spend on capital expenditures, they say. Non-financial companies are sitting on $1.3 trillion in cash. Using that excess cash to buy back company shares is getting less attractive with stocks trading near record highs. CEO confidence is on the rise. Borrowing costs remain low. There's also a lot of aging equipment and infrastructure that needs updating.

The third plank of the bullish call is the resurgence in U.S. manufacturing, which is getting a big assist from the domestic energy boom. The shale revolution, for example.

Study session is now over. Now the hypothesis has to come to fruition if the bull is to keep grinding higher and get an "A"grade from Wall Street.

By Adam Shell, USA Today