Short-term concerns about the automatic spending cuts notwithstanding, my models peg fair value for the S&P 500 index (^GSPC) at 1,575 - a 4 percent premium to Thursday's close. There are other models, including the Fed model, that show fair value as high as 1,700 or 1,750.
[The rally] is supported by improving fundamentals in the U.S. economy and, very importantly, valuation. [With] equities at a (price-to-earnings) ratio at 14 times earnings, they're just not expensive.
Our sense is that there is a lot of cash on the sidelines. Investors may do well to put that money to work in stocks - or to shift out of longer-term bonds into stocks, the better investment.
But even in a rising interest rate environment, equity bull markets historically retain some strength for a while, as the market responds to an improving economy.
~ Abbey Joseph Cohen, Senior Investment Strategist, CNBC, March 1, 2013