Wall Street recently posted six weeks of gains, encouraging a break amongst investors. The S&P has slid as a result.
Chief investment strategist Bruce Bittles recently discussed the situation in an interview. He explained:
“Following six straight weeks of gains for the S&P 500 and Dow industrials, stocks enter the new week in an overbought condition. Investor sentiment has turned more optimistic in recent weeks. This could be problematic, given that sentiment is approaching extreme optimism at a time when the seasonal headwinds begin to surface.”
Jim Paulsen of Wells Capital Management has a different outlook, predicting that the S&P will print 1,500 before 2013.
“We’re getting a lot of good reports- not just housing- but unemployment claims are falling, retail chain store sales are improving and we just got better confidence data.”
Referring to the U.S., he asks:
“Do you want to be out of the market at 13 times earnings with a sub 2% Treasury yield and when the economy is re-accelerating? That’s the big thing.”