Salient to Investors:

  • Individual investors have added $100 billion to equity mutual funds and ETFs in the past year, 10 times more than the previous 12 months, and vs. outflows of $300 billion in the 5 years through 2012 and inflows of $102 billion in Q1 2000 just before the tech bubble burst in March 2000.
  • Laszlo Birinyi at Birinyi Associates says we are in the last of the four bull market stages – the exuberance phase, but that the durable and sustainable bull market will surprise to the upside – to 2,100 on the S&P 500 by December – because we are not yet at a boiling point as skepticism indicates many investors have yet to buy.
  • Terry Morris at National Penn Investors Trust sees limited upside given Wall Street’s target has already been reached and typically late individual investors are buying.
  • Nick Skiming at Ashburton says individuals investors invest when they can only see blue skies.
  • David Kostin at Goldman Sachs upped their S&P 500 forecast to 2,050 on rising earnings and faster economic growth and relative attraction to bonds.
  • Julian Emanuel at UBS says the switch from the Fed as primary driver to corporate profits and a growing economy increases volatility and produces more muted returns, so he expects stocks to pause or correct a little.
  • Garry Evans at HSBC expects the S&P 500 to finish 2014 at 2,000 due to relatively expensive valuations.
  • Walter Todd at Greenwood Capital Associates said we are closer to the end of the bull market than the beginning, but it won’t end in the next few months.
  • Bloomberg says that since 1999 approx half of the time the S&P 500 ended the year over 10 percent away from the average strategist prediction in January of that year. The average strategist predicts the S&P 500 to reach 1,978 at year-end.
  • The S&P 500 is at 16.6 times estimated earnings, near the highest in 4 years, after lasting 64 months, or a year longer than average. Analysts estimate S&P 500 Q2 earnings rose 4.5 percent.

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