On Monday the Standard & Poor’s 500 index was poised to hit a new all-time high.
Just 15 points shy of its record peak of 2872.87, set on January 26th, the S&P was coming off a week of solid advances and a second-quarter earnings season that knocked the cover off the ball: With over 80% of S&P 500 companies having reported, earnings rose by a torrid 24% year over year.
That followed a solid July jobs report and strong second-quarter GDP growth of 4.1%. And with all the good news and recent stock gains, the S&P still changes hands at 16.5x 12-month earnings projections—pretty much in line with its five-year average, according to FactSet Research.
With fundamentals and valuations this good, what could possibly go wrong?