The one-year anniversary of the S&P 500’s all-time high took place on May 21, 2016. Stocks have largely been spinning their wheels for the past year. The S&P 500 has failed to return to its May 21, 2015, record high for 12 months. Stocks have actually been spinning their wheels for even longer, considering the S&P 500 is at the same level as it was on November 18, 2014 — an 18-month stretch. This week we take a look at what the stock market’s lackluster performance since the last record high might mean for the current bull market, now the second longest since 1950.
Our analysis of earnings conference call transcripts for the first quarter earnings period provides a mixed picture. The good news is that economic fears and drags from oil and the dollar are abating and earnings are almost certainly putting in a growth trough. However, conference call transcripts do not suggest sentiment is improving much, and management commentary is consistent with a continued slow growth environment. All of this casts some doubt regarding the strength of a potential second half earnings rebound.