Seeking Alpha

S&P 500 (SPY) records now and then: Corporate profits are 13% higher today than October...

S&P 500 (SPY) records now and then: Corporate profits are 13% higher today than October 2007, says BAML's Savita Subramanian, concluding stocks are "still playing catch up to fundamentals." Additionally, the index's dividend yield is 30% higher now and the P/E ratio is well-below levels of 2007 and 2000. "Waiting for a better entry point can be dangerous," she advises.
Comments (6)
  • Not sure that comparisons from bubble tops are very comforting.
    1 Apr 2013, 08:39 AM Reply Like
  • Allow me to translate:

     

    BAML: "Hey Main Street! Buy from us!"

     

    Losers.
    1 Apr 2013, 08:47 AM Reply Like
  • Note that she hasn't increased her year-end target of 1600 for the S&P 500. That means that she expects the market to gain a whopping two percent over the next nine months.
    1 Apr 2013, 08:59 AM Reply Like
  • I tend to agree fundamentally we're not seeing a bubble and comparisons to previous bubbles can be instructive. If we were seeing similar metrics it would be indicative of yet another equities bubble.

     

    I do think the market is due for a correction, simply based on the run it's had. With weakness in Europe and potential weakness (likely to be shortlived) In the US, the next correction could present the best buying opportunity for a rather extended period of time.

     

    Demographics, de-leveraging, business investment, etc are all pointing to positive as you get to the mid/later part of this decade. Today may not be a bad time to buy for the long term but I believe the next correction will represent perhaps the best overall time to buy for the next 20 years.
    1 Apr 2013, 11:29 AM Reply Like
  • Profits of the big companies are bigger since 2007 as they pay virtually no interest on bank loans,, have seen many smaller companies fail since the banks won't lend to them, and have managed to downsize employees without increasing wages.
    This has now come to an end.
    1 Apr 2013, 12:40 PM Reply Like
  • I understand that "Merrill is bullish on America", but when PM's start to give buy recommendations at record highs, it sounds eerily like a siren call. (Wikipedia: "The Sirens were dangerous and beautiful creatures, portrayed as femmes fatales who lured nearby sailors with their enchanting music and voices to shipwreck on the rocky coast of their island.") Tread carefully, my friends.
    1 Apr 2013, 02:18 PM Reply Like
DJIA (DIA) S&P 500 (SPY)