Job growth is surging despite the deleterious impact of the delta variant of the COVID-19 virus, or for that matter, the supply chain issues brought on by demand skyrocketing. Americans are going back to work rapidly. The US Economy is adding nearly half a million jobs a month in 2021. Fear of stagflation is officially dead. Good news.
Recent data from Bloomberg reports total dividend payments from the constituents in the S&P 500 Index are coming in at a cumulative $61.03 per share this year (a record high). Dividends in 2021 are 4% higher (YTD) than in 2020, which were $58.95 per share, a record high at that time. More good news. Return for the S&P 500 Index (so far) is 24%; year over year return is a spectacular 41.2%. More good news. Earnings in the S&P 500 have consistently beat estimates (by 82% last quarter) and many company’s earnings have significantly beat estimates. More good news.
All that being said, I still occasionally field questions about the “market being too high,” or not uncommonly, that the CAPE index’s valuation is high. CAPE is an index designed by Professor Robert Shiller of Yale which is a useful tool. Like any tool, it needs to be evaluated in the context of all the data available to investors. To that end, click here to read a very insightful analysis by Dr. Warwick Schneller of Dimensional Fund Advisor’s superb research staff. I hope you enjoy it.