“Bull markets are born on pessimism, grow on skepticism, mature on optimism and die on euphoria.” Sir John Templeton.
At Friday’s close of 2500, the Standard & Poor’s 500 index made a new all-time high and also capped its second strongest rise in history, up nearly 270%, eclipsing the 1949 – 1956 bull’s 267% rise, according to Bespoke Investment Group. The current rally – which began on March 9, 2009 – had already pulled into second place for longevity in April 2016, and has now lasted 3,112 days without a bear market, defined as a 20% drop. But first place is a long way off: The famous 1987 – 2001 rally logged 4,494 days and a 582% rise.
According to the WSJ today (7/31/17), 73% of the S&P 500 companies that have reported earnings for the second quarter have reported better than expected revenues. If that figure holds, it will be a record performance. The 5 year average is 53%. 57% of S&P 500 companies have reported so far.
Q2 revenue is growing at a rate of 5.2% vs. 7.7% for Q1 (the best quarter since 2012). Revenue beats are also by a wider margin than usual – 1.2% above analyst expectations vs. a 0.5% average over the past 5 years.
Donald Trump’s presidential victory is the second “improbable” event to occur in 2016 — just four months after the Brexit referendum. The message is clear: the status quo is totally unacceptable and the populist movement is real.
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