S&P 500 Has Strongest Start Since 1991

Bloomberg reports the S&P 500 slipped slightly last week to 1,342.64, trimming its gain for the year to 6.8%, still the best start since the index surged 8.8% in the first six weeks of 1991. The index advanced 0.6% to 1,351.26 at 9:34 a.m. in New York today.

“Companies with earnings least-tied to the economy, last year’s market leaders, are trailing now,” according to the news service. “Utilities have retreated 3.5% since the start of 2012, the biggest decline in the index, while phone companies lost 2.8% and houseware makers are down 0.1%. Banks and brokers, technology companies and commodity producers have rallied 11%, on average, data compiled by Bloomberg show.” 

Perpetual bear Gary Shilling of A. Gary Shilling & Co. isn’t as optimistic, however. In December, Shilling predicted a “severe” recession for Europe and a hard landing for China’s economy, assertions from which he hasn’t backed away.

“I also predict a moderate recession in the U.S. as we experience a retrenchment in consumer spending,” Shilling said Monday. “Retail sales reports for January will be released later this week. They were flat in December. Consumer spending has continued even though wages are flat. That can’t continue. As a result, the recession will get under way fairly early in the year.”