As I've noted before, I don't expect that the current third-quarter earnings season will have much of an impact on earnings expectations for 2014 and 2015, which remain quite bullish at $122.38 and $134.56 per share, respectively. So forward earnings, currently at a record $119.73, should continue to gain altitude, which is bullish for the flight plan mapped out by Blue Angels for the S&P 500, depending on forward price-earnings ratios, of course.
The forward p/e of the S&P 500 jumped to 14.6 at the end of last week, the highest since January 19, 2010. The S&P 400 midcaps and S&P 600 small caps spiked to nose-bleed p/e ratios of 16.8 and 18.3. All three market-cap indexes are at record highs.
Source: Ed Yardeni — Ed Yardeni is the president and chief investment strategist of Yardeni Research Inc., a provider of independent investment strategy and economics research for institutional investors.