Monday, February 10, 2014
Stock Market: Why The Bears Have No Teeth
While the alarmists are lamenting about the taper (slow & gradually reduction of the monetary stimulus programs) and problems in a row of emerging markets (Turkey, Argentina, Ukraine) the market seems to focus again on the good news.
The current earnings season (Q4 20013 reports) is proceeding encouragingly. Of the S&P 500 members who have reported so far, 76% beat analysts’ profit estimates, while 66 percent exceeded sales forecasts (bloomberg). Profit for the benchmark’s stocks rose by 8.3% in the fourth quarter of 2013 and revenue by 2.7%, according to analyst estimates compiled by Bloomberg (bloomberg).
Last week we learned that the U.S. service sector (ISM services), that covers around 2/3 of the economy, gained speed in January. We also heard that Europe´s manufacturing is getting better (ISM manufacturing).
I believe that rising company earnings & an advancing global economy will fuel further gains on the stock market and the S&P 500 could climb to 2,000 point and more through end of this year.