- Year over year growth in corporate profits, retail sales, auto sales, rail car loadings,port traffic, durable goods, employment, housing activity and bank lending
- S&P 500 trading at 13.1 times last year’s earnings and possibly 12 times this year’s expected earnings – historically very cheap
- S&P 500 dividend yield at highest level since 1995 (excluding generational low of 2008)
- Since 1953, the 10-year treasury yield has exceeded the S&P 500 dividend yield 90% of the time. Now S&P 500 dividend yield is almost 1% higher than 10-year treasury yields
- The last two times the S&P 500 dividend yield exceeded the 10-year treasury yield, March 2009 and September 2011, a huge rally followed
- Earnings yield (S&P 500 earnings divided by S&P 500) at highest level since 1988
- Earnings risk premium ( spread between earnings yield and risk-free bond yields) at record highs
- North American economy in expansion, U.S. and Canadian GDP on track for 2% growth
- Drop in commodity prices is healthy for the economy
- Corporate balance sheets are rock solid.
- Banks are well capitalized
