Most of the US stocks experienced surge on today as the benchmark stock gauge Standard & Poor’s 500 Index extended to record level. The S&P 500 index increased by 0.2% and the same is currently at 1,617.51. On the other hand, the Dow Jones Industrial Average experienced a decline of 4.38 points and it is currently at 14,969.58. Incidentally, 60% of the total listed stocks went ahead, whereas, the remaining experienced decline.
According to the Global Investment Strategist of Wells Fargo Private Bank, Sean Lynch, the market is still feeding off the positive figures in the US economy. Apart from that, things have been helped by the continuation of the Central Bank easing. Lynch added that many investors prefer equities and if the landscape of alternatives and opportunities are weighed in properly, it can easily be concluded that equities are the most favorable asset class at this point of time.
On last week, the S&P 500 Index went ahead by 2%. Apart from that, as the European Central Bank decided to cut the main refinancing rate, global equities experienced a jump on a whole as well. Incidentally, a total of 407 companies listed under the S&P 500 have reported profit so far and 73% out of those exceeded the earnings predictions done by the analysts. However, 53% of those companies missed the forecasts on sales.
Incidentally, this is the 5th year when the US stocks are of bull, mainly because of the better than estimated corporate earnings and also the 3 rounds of bond purchases conducted by the Federal Reserve. These 2 factors combined have driven the S&P 500 Index up around 139% from the 12-year low that it experienced in March, 2009. For the first time, the benchmark stock gauge traded over the 1600 mark. On 3rd May, the Dow Jones briefly surpassed the 15,000 mark as well and it ended the week 1.8% higher.
On the other hand, the Chicago Board Options Exchange Volatility Index, also known as VIX, declined by 1.3% after experiencing a tumble of 5.6% on last week. In 2013, the equity volatility gauge has gone down by 30%.
Birinyi Associates Inc. predicted correctly that the S&P 500 Index would reach 1,600 and it is one of the first advisors which asked the investors to buy US stocks before the bull market began in 2009.