The S&P 500 index reached yet another record high this week, and the six-year bull market has plenty of pep left in its step, says star strategist Thomas Lee, founder of Fundstrat Global Advisors.
Indeed, he predicts the S&P 500 index will rise to 2,325 by year-end.
"In some ways, that's a catch-up because Europe has done great this year, Japan has done great,"
Lee tells CNBC.
And what's going to push stocks higher? "The U.S. consumer is still one of the most important engines for growth," he argues.
"They're showing signs of employment life, not necessarily spending life yet. But once that turns, especially we're seeing that in housing, I think the focus comes back to the U.S., and there's a nice earnings story."
The unemployment rate fell to an almost-seven-year low of 5.4 percent in April, and housing starts surged to a seven-year high. But retail sales were unchanged last month.
"The market is usually good at predicting changes in [economic] trend," Lee notes. "I think the market is telling us the cadence in the next couple of quarters is going to be quite good."
But on the flipside, Robert Shiller isn't the only Nobel laureate from Yale University who devised a measurement of stock market value indicating bull market is well overdone.
Deceased Yale economist James Tobin fits the bill too, reports
John Kimelman of Barron's.
As for Shiller, his cyclically adjusted price-earnings ratio, which includes 10 years of earnings, shows the market is more expensive than any time except the pre-crash periods of 1929, 2000 and 2007.
Then there's Tobin's Q Ratio, which divides the total price of the U.S. stock market by the replacement costs of all companies' assets.
The ratio now stands at 1.1, according to
Bloomberg. That means stocks are trading at a level 10 percent above the value of companies' assets. The reading is higher than any time except the 2000 dot-com bubble and 1929.
"Readings above 1 are considered by some to be too high and the ratio has exceeded that threshold only 12 percent of the time, mostly between 1995 and 2001," Bloomberg notes.
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