Stocks reversed early losses to finish higher for just the second time in September.
Getty Images The S&P 500 gained 0.4% to 1,995.69, while the Dow Jones Industrial Average rose 0.3% to 17,069.71. The Nasdaq Composite jumped 0.8% to 4,586.52 and the small-company Russell 2000 advanced 0.6% to 1,164.99.
Unlike yesterday, when no news was bad news, no news was good news today. Really. Nothing happened. It was yawns all around, as just 5.5 billion shares changed hands today. Gluskin Sheff’s David Rosenberg thinks the market is “completely exhausted.” He explains:
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This is increasingly becoming an ultra-selective process towards generating alpha–treating the environment as a market of stocks instead of a stock market and screening more heavily than usual for areas with compelling valuations and improving earnings revision ratios. From a thematic standpoint, screening for what works and what does not work in an era of US dollar strength, rising personal savings rates, productivity0enhancing capex and rising bond yields will separate the wheat from the chaff.
Of all the challenges, valuation is arguably the most important and we must keep in mind that the forward price-too-earnings multiple for the S&P 500 at 15.7x is far ahead of the decade-long norm of 13.9. While earnings are still trending higher, the market’s near 8% advance this year on top of the 30% surge in 2014 is indicative of a market that is more than fully priced. In a nutshell, this market looks completely exhausted.
So am I.
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