Salient to Investors:
The S&P 500 Index return in 2013 is tracking day-to-day price moves in 1954 almost identically – a correlation coefficient of 0.95. In 1954 the S&P 500 rose a record 45 percent to reach a new high for the first time since 1929.
Jim Paulsen at Wells Capital Mgmt said what drove stock prices higher back then was a revitalization of absolutely destroyed confidence, while today the driver is that same slow but steady revival in confidence.
Jim Russell at US Bank Wealth Mgmt said the return of confidence theme is analogous to the 1950s. Russell said we got the good enough signal and investors feel the crisis environment is behind.
Bloomberg and Birinyi Associates said the average length of rallies since WWII is 4 years.
John Stoltzfus at Oppenheimer said we are nicely above the old high, and getting to where the economy is getting back online, and sees another leg up in this bull market. Stoltzfus said we get better at dealing with problems that are related to structural issues.
Paul Zemsky at ING Investment Mgmt said stocks are clearly less attractive than a year ago, but still attractive relative to many other asset classes.
Bank of America Merrill Lynch data show the S&P 500 has advanced 5.3 percent this quarter versus a total return of less than 0.1 percent for Treasuries and a gain of 5.4 percent for the S&P GSCI Total Return Index of 24 commodities.
Bruce McCain at KeyCorp said slowing US economic and earnings growth signal equities may lose momentum, while valuations are not at extremely low levels.
Economists cut growth forecasts this month to 2 percent for Q3.
The S&P 500 is 17 percent below the mean valuation since 1998 and versus the 21.7 high during the last bull market. US profits have increased an average of 4.2 percent per quarter since the start of 2012 versus the 28 percent average in 2010 and 2011. Analysts predict earnings will increase 5.2 percent for 2013 and 3.2 percent excluding financial firms and banks.
David Chalupnik at Nuveen Asset Mgmt said the S&P 500 is reasonably priced versus its own history and stocks are attractive.
Investors have added $15 billion to equity funds in 2013, the first annual increase since before the crisis.
Click here to receive free and immediate email alerts of the latest forecasts.