Salient to Investors:

The spread between analyst forecasts and S&P 500 stock prices is 5 percent, the smallest margin ever and less than half what it was when the index last peaked in October 2007, and versus the historical average of 14 percent. Bulls say the narrow margin shows securities firms are surprised by the rally and that equities will rise as the firms boost predictions. Bears say the narrow margin shows stocks are so far ahead of themselves that even market optimists are uncomfortable.

Warren Koontz at Loomis Sayles says the dislocation between near-term analyst opinion and the longer-term and better potential is an opportunity.

Howard Ward at Gamco Investors said many analysts and strategists have been skeptical of the market’s advance and don’t want to appear overly positive like in 2000 and 2007, and this analyst skepticism is a contrary indicator for the market.

Malcolm Polley at Stewart Capital Advisors said the market has not given analysts time to re-evaluate, and expects better economic and corporate data.

Johannes Jooste at Merrill Lynch Wealth Mgmt said the market is right and analysts are tardy and their fear of systemic risk is still excessive.

Bruce McCain at KeyCorp said the fundamentals are not dramatically better and so stocks are fully priced, while analysts have less to go on.

Walter Todd at Greenwood Capital Associates said many expected the market to muddle through half1 2013 when setting their targets, but we are getting to the targets set for the year much quicker.

5 companies issued earnings forecasts below analyst estimates in March for each one that predicted results above the average projection.

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