Salient to Investors:

Laszlo Birinyi at Birinyi Associates says:

  • The S&P 500 rally has a good year to go as investors give up their pessimism and buy. The bull is very much alive given this sort of hesitancy or reluctance instead of acceptance.
  • There is nothing troubling in view unless people start talking about S&P 2,000 or buy more Netflix.
  • It a surprise it’s not the deep cyclicals or the names that I would have expected in a really good market, which shows that people are comfortable with the market, and there’s more of a focus on stock picking than people realize.

Jeffrey Kleintop at LPL Financial expects flat earnings growth, and says the market needs earnings to rise before it can really begin to move higher. Kleintop said health-care and consumer staples leading the rally also signal the advance in the S&P 500 may slow because you don’t usually see defensive groups leading the market to all-time highs, and we may see repeat the last few years of a pullback starting in April. (The S&P 500 lost 16 percent over two months in 2010 and 19.4 percent over five months in 2011, both starting in April and both recovering when the Fed committed more QE.)

  • Investors added $14.1 billion to equity mutual funds in February and $20.2 billion to bond funds; versus $600 billion withdrawn in the 6 years through 2012.
  • Share volume on all US exchanges has declined for 4 straight years and is the lowest since at least 2008.
  • Analysts forecast per-share earnings to reach $109.40 in 2013 versus $62 in 2009, but expect a contraction of 1.8 percent in Q1 2013.
  • The average strategist expects the S&P 500 to hit 1,583 in 2013.

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