Monday, October 21, 2013

Flying High Into the Wild Blue Yonder (excerpt)


As I’ve noted before, I don’t expect that the current Q3 earnings season will have much of an impact on earnings expectations for 2014 and 2015, which remain quite bullish at $122.38 and 134.56 per share, respectively. So forward earnings, currently at a record $119.73, should continue to gain altitude, which is bullish for the flight plan mapped out by Blue Angels for the S&P 500, depending on forward P/Es, of course.

The forward P/E of the S&P 500 jumped to 14.6 at the end of last week, the highest since January 19, 2010. The S&P 400 MidCaps and S&P 600 SmallCaps spiked to nose-bleed P/Es of 16.8 and 18.3. All three market cap indexes are at record highs.

Today's Morning Briefing: The Sky Is the Limit. (1) The huddled masses vs. Washington’s elite. (2) The streets are paved with gold in DC. (3) Unlimited opportunities for fiscal and monetary policies. (4) A suspended ceiling. (5) Evans: Only the Shadow knows when QE will be tapered. (6) Another relief rally to record highs. (7) Nothing to fear but nothing to fear. (8) Nose-bleed valuations. (9) Flying high with the high flyers. (10) No more pain in Spain? (11) “Wadjda” (+ +). (More for subscribers.)

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