The S&P 500 may be headed downward right now, but here are seven reasons to believe it will go up. Way up. One: International Paper and Georgia Pacific just raised prices on containerboard. Forget about all government data for a second. Why would the two companies involved in every shipment made around the world increase prices? Because demand is there.
Two: Consensus among analysts for S&P earnings for 2011 is $94. With the S&P near 1050 that puts us barely above a multiple of 11 times earnings with the historical average somewhere near 15.
Three: We are still in the middle of an inventory rebuild after the Great Liquidation that wiped out all inventories in 2009. And corporate profits are still near all-time highs, in part due to the enormously slack labor market created by 10% unemployment. In fact, corporate profits at their highest levels ever: (more)
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