One reason the market is strong – the Street has been behind the curve in earnings estimates . . .

| April 30, 2011

Wall Street analysts were too conservative with earnings estimates for Q1.  As can be seen in the chart from Thomson Reuters, earnings estimates have been sharply revised upward since the beginning of the earnings season.  No wonder the S&P 500 is up nearly 3% for the month of April.  Jeb Terry, Sr. Apr. 30, 2011 Source: […]

Still in the sweet spot of the Presidential market cycle . . .

| April 30, 2011

A recent report by BofA Merrill Lynch highlights the typical market performance as we progress through the four years of a Presidential term.  The conclusion: Year 3, such as now, is the best year of the cycle and is up an average of 14% going back in the data to 1931.  The market has been […]

Equity mutual fund investors are still scared and on the sidelines . . .

| April 23, 2011

The data from the Investment Company Institute shows retail investors have missed most of the move in the equity market – they still own too many bonds. Equities have plenty of upside until the retail investor comes back into the market and buys stocks and mutual funds aggressively. The following chart by illustrates that […]

The Weekly Leading Economic Indicators still trending up – better than prior recessions . . .

| April 18, 2011

The weekly figures from the Economic Cycle Research Institute are still trending up indicating the economy has upward momentum.  The move off the lows of 2008 has been stronger than in the last two recessions.   Jeb Terry, Sr. Apr. 18, 2011 Source: Economic Cycle Research Institute, Aberdeen Investment Management Aberdeen Investment Management – a guide […]

Consumer confidence says we are not near a top . . .

| April 8, 2011

Ed Yardeni (see his post here from Apr. 3) posted the following chart about consumer confidence.  We need to see a top in the “present situation” component to become worried about a top in the economy and/or a top in the stock markets.  The red line below suggests we are no where near a top. […]

The ISM manufacturing report accurately called the upswing in employment – more to come. . .

| April 4, 2011

The ISM survey of manufacturers reported Friday that its Employment Index remained near the highest in 38 years.  Friday’s reading of 63, following the reading of 64 in early March, is only the 2nd time since 1973 that the index has been as high.  Peak readings in the Employment Index correlate well with rising New […]

Profits are still heading up, Q1 should extend the trend . . .

| April 4, 2011

Ed Yardeni (see his post here from Mar. 28) recently blogged that one of the most important reasons to be optimistic is that corporate profits remain in a “super-normal” recovery.  I agree.  Profits from current production (on a cash flow basis, blue line) are 8% above the last cyclical peak in Q3 2006 and headed […]

Best Q1 gain for S&P 500 since 1998 – more upside suggested

| April 4, 2011

S&P 500 has best Q1 since 1998 . . . It is noteworthy that the S&P 500, with a Q1 gain of 5.4%, had the best 1st quarter performance since 1998.  Since 1970, the year has gone on to finish higher than Q1 in 92% of 12 instances where Q1 has had a gain of […]