Salient to Investors:

  • The market looks more and more like the dot-com bubble market except for valuations: 19x now versus near 30x then.
  • Widespread gains now compare with the concentration in computer shares back then. The S&P 500 Equal Weight Index has risen at an annualized 28% rate since 2009, near double the return in the last half of the Internet bubble. 380 S&P 500 stocks have risen in each of the last 5 years versus 307 in the 1990s. 48 stocks are now at 52-week highs versus 27 at the peak in 2000.
  • Annualized returns of 24.5% since March 2009 compared with 27.1% over an equal amount of days ending March 24, 2000, the peak of the Internet rally.
  • The put-call ratio is near its highest since October 2008.
  • Ed Hyland at JPMorgan Chase Private Bank said the market is expensive but not in the bubble and could go higher.
  • Brad McMillan at Commonwealth Financial Network said the market is in a clear upward trend.
  • Howard Ward at Gamco Investors said the market is rationally responding to improving domestic economic news, extraordinarily low interest rates, easy money and limited inflation, so its valuation is justified.
  • Cameron Hinds at Wells Fargo Bank said today’s market is justified on the underlying fundamentals, unlike the clearly excessive levels in 2000.

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