The Standard & Poor’s 500 Index hit an all-time high yesterday, closing at 1,897.45. The Dow Jones Industrial Average also hit a record, ending at 16,715.44. This should be tempered by noting that the Dow is up less than 1 percent so far this year, while the S&P 500 has gained about 2.7 percent. One big down day can erase all gains for the year.
The small-cap Russell 2000 Index has been playing the spoiler, failing to reach new highs. Perhaps this is less surprising, after last years’ blistering 38 percent gain for the Russell, and 43 percent run-up for its growth index. No one expects new records anytime soon from the Nasdaq Composite Index. It is up about fourfold from its 2002 low, but still is almost 20 percent below its peak more than 14 years ago.
Each new set of highs seems to be greeted with derision and skepticism. The evidence shows that new highs are bullish, but that seems not to matter very much to the skeptics. The U.S. economy is the cleanest shirt in the dirty hamper. Year-over-year increases in corporate revenues and better-than-expected earnings should also give investors a reasonable basis for anticipating equity gains.
This morning, I want to take a quick look at what is bullish and bearish for stock markets. continues here