NEW YORK ( TheStreet) -- No one is necessarily calling for smooth sailing for the rest of the year but sentiment definitely took a turn toward the bullish late last week that ultimately carried over into Monday's session.

S&P Capital IQ dug a little deeper than just giving the better than expected July jobs report and embedded expectations of eventual stimulus from the Federal Reserve all the credit. The firm asked whether this burst back to levels unseen since early May has been a function of investors backing and filling in defensive areas, rather than real enthusiasm for equities.

"Throughout this two-month recovery, most financial headlines have focused on its short life expectancy, due to a host of global economic worries," wrote Sam Stovall, chief equity strategist. "Yet only one of the best-performing sectors during the June 1 to August 3 advance could be called a truly cyclical sector: Financials. Three of the others -- Consumer Staples, Health Care and Telecom Services -- are unquestionably defensive sectors, whereas Energy, a frequently overlooked market outperformer during broadbased declines, posted the strongest advance, rising 13.6% versus gains of 8.1% to 11.9% for the remaining top performers."

The firm itself is a believer that there is more room to run as it lifted its 12-month target for the S&P 500 last week by more than 3% to 1500 from 1450, putting the year-end 2012 projection at 1430, implying 2.5% upside from Monday's close at 1394.23, a level that already represents a 10.9% year-to-date gain.

Among S&P CapitalIQ's "plethora of positives" are the strong performance of the broad market in the first two months of 2012 as it pointed out this has resulted in an average full-year return of 24% since 1945 with advances occurring in 25 of the 25 instances. Not bad odds. The firm also said the "dragged-out decline" that played out following the early April highs is favorable as similar slides have tended to be shallow in the past.

The looming presidential election makes the favorable list as well with Stovall writing that: "78% of election year lows since 1900 occurred in the first half, while 85% of annual highs happened in the second half with 70% in Q4" and that third quarters are especially strong in such years with August posting the highest monthly average performance.

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