S&P 1500

Time sure does fly. Summer started on June 21. It will end next Friday, on September 21. It’s been a great summer rally. The S&P 500 is up 12.2% since June 1, and 14.2% ytd. The S&P 500 is only 8.2% below its record high on October 9, 2007. The S&P 400 MidCap index is up 14.3% ytd and just 1.0% below its record high on April 29, 2011. The S&P 600 SmallCap index is up 14.5% to a record high.

The bull markets in all three S&P market cap indexes have been led by their forward earnings, which are at record highs. Their valuation multiples are more or less even with where they were when stocks started to rebound from the bear market during March 2009.

Maybe we should consider going away and coming back after the November 6 elections, assuming there will be a yearend rally too. That will depend on the results of the election and whether they lead to more or less gridlock in Washington. If there is more gridlock, there is a greater risk that the economy could fall off the fiscal cliff early next year. In this case, there might not be a yearend rally. It’s getting harder to get charged up about the near-term prospects for stocks.

Today's Morning Briefing: A Change of Seasons. (1) Will summer rally be followed by yearend rally? (2) Many stocks at or near record highs. (3) Record high forward earnings. (4) No QE4 after QE3. (5) Not much growth here or there. (6) No jolt in JOLTS jobs report. (7) Not much spice in China’s tax revenues, money supply, and loans. (More for subscribers.)