Target

At least so far, it appears that earnings being reported are living up to and/or exceeding expectations. In fact, the beats seem to be coming both on the earnings themselves plus the revenues. Now by itself, meeting or beating expectations wouldn’t be important but if you are considering earnings in setting a stock’s price target then when they do beat expectations you see target adjusted.
Of course what you tend to see immediately is a drop in the stock’s price as right before earnings, enthusiasm or the whisper on the street gets certain investors into the stock. Of course, professional traders, spotting this and seeing that the price is going up because of the “rumor” will get in. They are only interested in holding the stock until the enthusiasm has run its course and tend to sell “on the news”. This often leads to a short term drop even on a good news story.
Of course over a longer term, the increased earnings will then lead to an increase in the stock price. Now with the better earnings, it is time to take another look at the S&P 500 and whither it goes. The improved earnings and low interest rates indicate that the S&P has some room to grow. My new estimate is around 1350.
There are those who still expect the market to pull back and certainly it might go down and consolidate. However, if the earnings returns validate the Market at 1350, it will reach that point. Of course if interest rates go up significantly, the P/E ration will adjust. However, I don’t see that happening this year to any great extent.