From the Wall Street Journal’s “Stock Futures Edge Higher Ahead of Jobless Data” posted early Thursday:
Major U.S. indexes stand at or close to all-time highs, bolstered by a surge of economic growth and corporate earnings as restrictions on some activities are relaxed. Some investors say the speed of the U.S. recovery, which stands in contrast to some other regions where Covid-19 vaccines aren’t as widespread, will keep stocks on an upward trajectory.
“We should see cash flows and company cash flows really improve, especially with the reopenings happening,” said Mary Nicola, a fund manager at PineBridge Investments. Although valuations are high, stocks remain attractive compared with low-yielding bonds, she added…
Companies have blown past forecasts so far this earnings season. Of the 381 companies on the S&P 500 that had reported through Wednesday, 84% had topped analysts’ expectations, according to FactSet.
Yet many companies beating forecasts have seen a lackluster response in their share price. Some investors say that is a sign, alongside recent volatility in tech stocks, that the rally that began last March is beginning to flag.
“Although the S&P is just 1% off its high, I think equity markets are beginning to look very fatigued,” said Paul O’Connor, head of multiasset investments at Janus Henderson.
My take: Apple is 12% off its high. Just sayin’.