Here's What Happened The Last Time The S&P Surged To 1400

This is an interesting way of looking at the market from Morgan Stanley’s Adam S. Parker.

The S&P, having recently hit 1400, closely resembles the S&P in late 2006, when stock surged hard over the course of a quarter to 1400.

chart

Photo: Morgan Stanley

As you can see, if history is any guide, then the momentum carried stocks through towards 1600, and we all know what happened after that.

The point of the study isn’t actually to suggest that the market will mirror any of those moves.

Parkers is mainly interested in how times have and haven’t changed.

As for the index itself, a couple things really stand out.

  • Earnings are significantly higher, at $107.00 for the S&P today vs. $91.30 back then.
  • Earnings are more concentrated in a few number of stocks today.
  • Market cap is also more concentrated, this chart gives you a nice look at that.
chart

Photo: Morgan Stanley

And as for the economy, thinks are ‘vastly worse’ today.

chart

Photo: Morgan Stanley

NOW WATCH: Money & Markets videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.


Tagged In

markets moneygame-us