Slow slog in stocks is now a steamroller crushing the naysayers

davfor

A year that has rewarded those who have simply enjoyed the ride.....

The gains are smaller, befitting a less hysterical year. When the S&P 500 Index has risen in 2021, the daily increase has been half what it was in 2020. But in terms of persistent, day-after-day gains, these seven months in the U.S. stock market have few historical precedents.

Over the last century, there has been just one other year when the benchmark set more high-water marks by this point in the summer -- in 1964.

Slow Slog

Plus, an optimistic view going forward:

What’s keeping stocks aloft? As usual, the answer is corporate America’s earnings machine.

...the equity market is not the economy. If you compare the two, the equity market has massive technology in it, a lot less small-caps. Those earnings are super defensive to a no-GDP-growth scenario.”

In the eyes of analysts who follow individual companies, profit growth is set to slow, but at roughly 10% in each of the next two years, that would still top the historic rate of 6% annually.

Profit margins, which just reached a record high, are expected to increase over the next years, analyst estimates compiled by Bloomberg Intelligence show.

To Paulsen, chief investment strategist at Leuthold, this boom cycle is just starting.

S&P 500 Snubbing Dire View

carew388

For 1964, unfortunately, the calm before the storm-Vietnam War and stagflation.