S&P 500 Breaks 1700 for the First Time in History

Justified or not, it happened.

The proximate cause for today’s rally – a big jump in the monthly ISM survey included stellar strength in New Orders. Plus, weekly jobless claims dropped to a level not seen since January of 2008 – five and half years ago.

In addition, global markets rallied overnight as China put up a non-scary PMI number and improvements seemed to be taking hold in Europe. The ECB’s Mario Draghi was dovish, as was our own FOMC yesterday.

The sequester has been a drag on the economy this year but it has reined in spending, cleared out some excesses. In the meantime, we’re growing slowly despite it. Earnings estimates for the S&P 500 are now trending up toward $120 a share putting us in fairly valued, but not richly valued, territory.

Carry on.

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