record-high-prices-is-no-reason-to-dump-stocks:-morning-brief

Record-high prices is no reason to dump stocks: Morning Brief

Get the Morning Brief sent directly to your inbox every Monday to Friday by 6: 30 a.m. ET. ” data-reactid=”17″ type=”text”>Get the Morning Brief sent directly to your inbox every Monday to Friday by 6: 30 a.m. ET. 

Subscribe” data-reactid=”22″ type=”text”>Subscribe

^GSPC) set a new record high this week for the first time since Feb. 19, surging an eye-popping 51% from its March 23 closing low of 2,237 to a closing high of 3,389 on Tuesday. This represents the shortest bear market and third fastest bear-market recovery ever.” data-reactid=”24″ type=”text”>The S&P 500 (^GSPC) set a new record high this week for the first time since Feb. 19, surging an eye-popping 51% from its March 23 closing low of 2,237 to a closing high of 3,389 on Tuesday. This represents the shortest bear market and third fastest bear-market recovery ever.

And Wall Street’s top stock market forecasters think there could be more gains ahead.

“Reaching a record high in stocks is no obstacle to further gains,” UBS’s Mark Haefele said. “Since 1960, one-year returns after the S&P 500 has hit a high have been 11.8%, slightly greater than the 11.3% when the market is below an all-time high.”

Similarly, LPL Financial’s Ryan Detrick looked at the history for comparable stock market runs.

Detrick observed. “Yet another reason to think that this bull market from a long-term point of view could have some more tricks up its sleeve.”” data-reactid=”28″ type=”text”>“One, three, six, and 12 months after the first new high in more than five months show stronger performance than average or after any new highs,” Detrick observed. “Yet another reason to think that this bull market from a long-term point of view could have some more tricks up its sleeve.”

View photos

(LPL Financial)

economy remains in pretty bad shape. Just yesterday, we learned initial jobless claims unexpectedly ticked up above a million once again, ending a four-week streak of declines.” data-reactid=”49″ type=”text”>This comes as the economy remains in pretty bad shape. Just yesterday, we learned initial jobless claims unexpectedly ticked up above a million once again, ending a four-week streak of declines.

But remember, the stock market is a leading indicator, meaning prices largely reflect what’s expected to come and less so what’s already happened. And what we’re witnessing isn’t unprecedented.

“[W]e found there were four other times the S&P 500 made a new high during a recession: In February ’61, July ’80, November ’82, and March ’91,” Detrick said. “Incredibly, a new expansion started the following month every single time. Could stocks at new highs be signaling an end to this recession? We think that very well could be the case again this time.”

Keep in mind that recessions don’t end when things are great. They end when things stop getting worse. Remember that because, as we noted earlier, stocks are a leading indicator.

With regard to historical comparisons, Datatrek’s Nick Colas considered 2009, the year when the prior bull market began in the depths of the global financial crisis.

“The match is eerily close, and 105 days from the 2009/2020 lows the S&P is just slightly better (2 points) than back in 2009 on the same trading day,” Colas observed.

View photos

(Datatrek)

“If you’re bullish, the fact that the 2009 experience points to a further 11% gain between now and year end is welcomed news,” Colas added.

Obviously, 2009 and 2020 are very different. Colas notes that in 2009, financials led the way. Today, it’s tech. Back then, a new U.S. president was just put into office. This year, that seat is up for grabs.

In both instances, fiscal and monetary policy was very aggressive.

driven by a sharp earnings rebound) is closer than one would think likely,” Colas said.” data-reactid=”78″ type=”text”>“Ultimately the 2009 – 2020 comparison is a reminder that 1) bottoms occur when government policy responses match the scope of an economic downturn and 2) the nature of the market’s recovery will vary by sector, but the aggregate return (driven by a sharp earnings rebound) is closer than one would think likely,” Colas said.

Goldman Sachs’ recently updated bullish 3,600 target seem modest.” data-reactid=”79″ type=”text”>Should the market continue to follow the 2009 path, the S&P 500 could end the year close to 3,800. That makes Goldman Sachs’ recently updated bullish 3,600 target seem modest.

Getting to 3,800 would be surprising. But, what else would you expect from 2020.

Sam Ro, managing editor. Follow him at @SamRo” data-reactid=”85″ type=”text”>By Sam Ro, managing editor. Follow him at @SamRo

What to watch today

  • 9: 45 a.m. ET: Markit US Manufacturing PMI, August preliminary (52.0 expected, 50.9 in July)

  • 9: 45 a.m. ET: Markit US Services PMI, August preliminary (50.8 expected, 50.0 in July)

  • 9: 45 a.m. ET: Markit US Composite PMI, August preliminary (50.3 in July)

  • 10: 00 a.m. ET Existing home sales, July. (5.41 million expected, 4.72 million in June)

  • Pre-market” data-reactid=”94″ type=”text”>Pre-market

    • 6: 45 a.m. ET: Deere (DE) is expected to report adjusted earnings of $1.24 per share on revenue of $6.65 billion

    • 6: 45 a.m. ET: FootLocker (FL) is expected to report adjusted earnings of 54 cents per share on revenue of $1.97 billion

    • 6: 30 a.m. ET: Pinduoduo (PDD) is expected to report an adjusted loss of 1.45 yuan per share on revenue of 12.15 billion yuan

    Top News

    Appeals court grants stay, giving reprieve to Uber and Lyft in CA [Reuters]” data-reactid=”103″ type=”text”>Appeals court grants stay, giving reprieve to Uber and Lyft in CA [Reuters]

    Here’s why the fight over Trump’s financial, tax records isn’t over by a long shot” data-reactid=”105″ type=”text”>Here’s why the fight over Trump’s financial, tax records isn’t over by a long shot

    Social Security backlog led to bankruptcies and increased risk of death, government watchdog finds” data-reactid=”106″ type=”text”>Social Security backlog led to bankruptcies and increased risk of death, government watchdog finds

    Warren Buffett’s favorite stock market indicator reaches internet bubble extreme” data-reactid=”107″ type=”text”>Warren Buffett’s favorite stock market indicator reaches internet bubble extreme

    Twitter, Facebook, Instagram, Flipboard, SmartNews, LinkedIn, YouTube, and reddit.” data-reactid=”109″ type=”text”>Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, SmartNews, LinkedIn, YouTube, and reddit.

    Find live stock market quotes and the latest business and finance news” data-reactid=”110″ type=”text”>Find live stock market quotes and the latest business and finance news

    For tutorials and information on investing and trading stocks, check out Cashay” data-reactid=”111″ type=”text”>For tutorials and information on investing and trading stocks, check out Cashay

    Leave a Comment

    Your email address will not be published. Required fields are marked *

    Scroll to Top