The market hasn’t had to cope with disappointing news
Increased confidence raises the expectations bar
Rising yields & growth hiccups offer a challenge
The S&P 500 has benefitted from an unprecedented string of good news. The economic surprise index has been positive since June (the longest continuous streak on record) and for most of that time has been accompanied by a rising earnings revision trend. Since 2003, this combination of positive economic surprises and rising earnings revisions have occurred less than 30% of the time. But in that environment, the S&P 500 has risen at a 20% annual rate, versus an overall annualized gain of 8.7% since January 2003.
