Our latest bear and bull survey results are in: 63% of voters are feeling bullish — down from 68% the previous month.

The S&P 500 is having its best six-month start since 1997 — and the rally has been so strong that even one of the most bearish strategists on Wall Street reversed his tone.

Wall Street’s feeling the FOMO: Other analysts are also changing their sentiment from bear to bull. Citi raised their year-end S&P 500 target to 4.6K from 4K. But August started with a slump — falling 1.3% yesterday to start the month with back-to-back daily declines. IG Markets’ chief market analyst is getting a “feeling that the market is looking for excuses to take some profits” (BBG).

Markets are starting to look expensive…

After their recent move higher, the S&P 500 is trading at a forward 19.7x price-to-earnings ratio — higher than the five-year average of 18.6x (WSJ).

• Unless earnings start catching up, the market upside could be limited — or worse, if earnings fall in the case of a recession, that could trigger another pullback.
• So far, so good. 81% of S&P 500 companies that reported earnings have beaten analysts’ expectations — higher than the five-year average of 77%.

But there’s another sign that the market is slowly coming back to life…

Big IPOs claw their way back

While August is typically a slower month, September could play out differently — with several major companies expected to go public:

• After a failed acquisition attempt by Nvidia, chipmaker ARM is planning to go public with a $60-70B valuation.
• German sandalmaker Birkenstock is expected to go public with an $8B valuation.

ARM wants to raise $10B — which would make it the largest IPO in tech industry history since Alibaba’s in 2014. And depending on their success, we could see a wave of companies hitting the public markets after a long drought.