No, I'm not kidding. The S&P 500 index is up over 8 percent year-to-date. That is better than most years, in fact it's the best first seven months of the year performance since 2009. Before that, you had to go back to 2003 to get a better performance.
And yet, no one seems to believe that the stock market is having a very good year.
Part of the problem is that everyone seems to be underperforming in some way. Hedge-fund traders routinely complain to me that sharp intraday moves and the constant meddling of central bankers in the markets make it impossible to buy stocks purely on fundamentals.
Mutual funds seem to be having an even tougher time. JPMorgan Chase noted this morning that the average large-capitalization mutual fund is trailing the S&P 500 by 111 basis points. That is a lot.
Only 13 percent are beating their benchmarks by more than 250 basis points (normally 26 percent beat), and 32 percent (one in three) are underperforming by more than 250 basis points, the worst performance since 2008.
How to explain the underperformance? Most likely it's because the April-May swoon in stocks caused investors to become more defensive, which left them underperforming when the S&P staged a nice rally in June. Ouch.
One thing's for sure: There are a lot of people that have remained short on cyclical names like industrials and materials. That is a positive for the markets. I noted yesterday that the moves up in those groups were fairly modest, which signaled to me that there has not been a big move yet to cover those shorts.
1) The European Central Bank will hold its August meeting next Thursday, a day after the Federal Reserve meeting. Expectations are higher after yesterday's comments, but it's not clear what he will do. Most seem to favor another long-term refinancing operation, with even looser collateral requirements.
There was an article in the French paper Le Monde that the ECB will be making sovereign debt purchases on behalf of the European Financial Stability Facility/European Stability Mechanism. There is some confusion about what this means: It implies that the ECB is merely lending its expertise to the EFSF/ESM and that the ECB is not actually reviving its bond buying program. This will likely change.
2) Real estate is still improving: DR Horton reported earnings that were better than expected, with orders rising 25 percent. That's good, but not as good as the 48 percent gain reported by Meritage or the 32 percent growth reported by PulteGroup yesterday.
Mall owner Taubman also reported strong results: "These strong results were propelled by increases in rents and recoveries at our centers. Leasing activity continues to be strong and retail bankruptcies remain at historic lows."
Wood giant Weyerhauser was a penny short, but had positive comments on the housing business: "We are seeing signs of a rebound in the U.S. housing market, and as markets strengthen, the operational improvements within our Wood Products business are yielding clear results," Weyerhaeuser CEO Dan Fulton said.
3) Earnings: 282 companies in the S&P 500 reporting (56 percent), 66 percent are beating on earnings (above historic norm of 62 percent), and only 40 percent are beating on revenues (well below the historic norm of 61 percent).
Third-quarter and fourth-quarter earning continue to come down: Third-quarter estimates are now expected to be DOWN 0.3 percent (from up about 6 percent expected a few weeks ago); fourth-quarter is now expected to be UP 11.4 percent (from about 16 percent a few weeks ago).
—By CNBC’s Bob Pisani
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