James Butterfill, Equity Strategist at Coutts, considers S&P 500 passing all-time high
The US has now surpassed the mother of all psychological barriers, the all-time-high. This begs the question, will we now see a substantial correction as investors take profits having risen a whopping 9.9% year-to-date?
To put this in perspective, if the S&P500 was to continue to rise at the rate seen this year's rate, the index would close 2013 at year-end, a total YoY rise of 41%. Historically, when equities have hit all-time-highs after a long doldrum periods, they tend to continue to rise for the following six months.
The index also recently pushed past our full-year fair value of 1555, this target is based on our assumptions for macro economics, most notably purchasing managers' buying intentions, money supply, leading economic indicators and the USD.