Results 1,901–1,950 of 2,129 found.
Valuation Changes During the Current Bull Market
There is always a lot of attention paid to the price changes that sectors have experienced during the current bull market, but there's not much focus on the changes in their valuations. Below we take a look at both using a scatter chart that shows the percentage change in both price and P/E ratio since March 9th, 2009. As the price of the sector rises, earnings need to rise just as much or else the P/E ratio will increase. It's common for P/E ratios to expand during bull markets, but a sector becomes more attractive if it can keep its valuation down as its price increases.
The 10-Year Earnings Picture
Here at Bespoke, we have a huge database that has every US earnings report going back to 2001. For each earnings report, we have how earnings and revenues came in versus expectations, any guidance that was issued, and in-depth price action analysis. From our database, we're able to combine all of the earnings information for individual stocks to come up with macro earnings trends as well. Since 2001, there have been more than 64,000 quarterly earnings reports. Of those 63% of companies have beaten consensus analyst earnings per share estimates, while 25% have missed earnings estimates.
Inflation Worries? Commodities May Help
Many of you may remember the movieThis classic shed some interesting light on the world of commodities.Commodities include natural resources, industrial metals, precious metals, and agricultural products. Or, as Duke explained to Billy Ray Valentine, "Commodities are agricultural products...like the coffee you had for breakfast...wheat, which is used to make bread...pork bellies, which are used to make bacon, which you might find in a BLT sandwich. And then there are other commodities, like frozen orange juice...and gold. Though, of course, gold doesn't grow on trees like oranges."
Mergers, Acquisitions and Opportunities
After several years in which worldwide M&A activity dropped steeply, corporate dealmaking could make a comeback in 2011. Corporate cash balances are near record highs, and management teams are turning to M&As to create shareholder value, a trend that is likely to continue over the next 12 to 18 months. Last year saw worldwide small-cap M&A deals jump 14.7% over the previous year, especially among technology, healthcare and industrial names. The Small Cap team at Eagle Boston, witnessed the same trend in their portfolios, as several holdings were acquired by larger competitors during 2010.
The Revolving Door at the Fed of New York; Dick Alford on False Dichotomies in Monetary Policy
This week in The Institutional Risk Analyst, we feature a comment by Richard Alford on the false dicotomy between discretionary and rules-based regimes when it comes to monetary policy. But first we want to do a little review of the latest disgorgement of documents by the Fed. Listening to the debate between the "borrow and spend" camp led by Paul Krugman et al and the cut the deficit camp led by the Tea Partiers in Congress and around the nation, we are reminded again of the film "The Matrix" and its predecessors.
Here we are at the end of the first quarter of 2011 and we watched the markets move basically upward for the first six weeks of the year, advancing as much as 8% in some cases.Then, uncertainty escalated around the world beginning in mid February.First, there was the fall of the Tunisian and Egyptian governments, along with unrest in other Arab countries. Then in mid March, Japan suffered its earthquake. Meanwhile, the U.S. government kept itself running by passing a series of continuing resolutions, while the politicians still could not come to grips with an approved budget and deficit.
Weekly Market Update
Last week brought more bad news regarding the residential housing market. There were declines in sales volume of both new and previously occupied homes for the month of February. Additionally, one major and closely followed home price index exhibited a 3.1% decline in January, marking the fourth consecutive month of price declines for this index. In most regional markets, the situation remains deflationary as prices continue to slip and (as is characteristic of deflationary markets) demand declines as buyers await further price declines before jumping in.
Small-/Mid-Cap Growth ? Why Today?s Market Cycle is Different
We believe the outlook for small- and mid-cap growth stocks remains bright as we move into the later stages of the economic recovery. While the asset class is typically expected to underperform at this point of an economic rebound, there are three important distinctions that make this cycle different: 1) scarcity of growth, 2) continued M&A activity and 3) commodities inflation.
Unemployment Rates By State
While traders are already eagerly awaiting this Friday's employment report, we thought we would tide you over with a look at recently released levels of unemployment by state from the Department of Labor. The states with the lowest unemployment rates are North Dakota (3.7%), Nebraska (4.3%), and South Dakota (4.8%). While some will attribute the low unemployment rates in these states to the boom in agriculture, the reality is that these states have routinely had among the lowest unemployment rates in the country throughout history.
Bill Miller vs The S&P 500
Even though "the streak" of beating the S&P 500 for fifteen consecutive years ended in 2005, Bill Miller still commands the respect and attention of investors all over the world. Although Miller had some rough years during the financial crisis, ever since the S&P 500 bottomed in March 2009, his Legg Mason Value Trust Fund (LMVTX) has outperformed the S&P 500. Since March 9th, 2009 Miller's fund is up 115% through yesterday, while the S&P 500 is up 91.2%.
Mixed Fed Messages Reflect Murky Outlook
Mixed. Unsettled. Not altogether reassuring. Sounding a lot like the current state of the U.S. economy, that was the tone of the policy statement issued March 15 by the open-market operations committee of the U.S. Federal Reserve. It certainly didn?t provide comfort to those fearing that the Fed is in the process of fueling future inflation flames, nor did it offer any encouragement to savers hoping for higher short-term interest rates in the near future. What the statement did accomplish was help support the economic, inflation, and Fed policy outlooks of the fixed income team at ACI.
A Crime Called Private Mortgage Insurance; Alex Pollock on the Political Finance of Covered Bonds
This week in The IRA Advisory Service, we review the Fed's latest stress test exercise and discuss what it means for the banking industry and the US economy. While the US central bank did not provide results for specific institutions, the assumptions in the Comprehensive Capital Analysis and Review (CCAR) are more instructive than the Big Media seems to notice. Indeed, a close reading of the CCAR document provides a compelling argument for why the Fed should not be supervising financial institutions.
Asset Correlations to S&P 500
While oil and stocks are positively correlated, stocks and bonds have an inverse correlation. In fact, the two asset classes haven't been this inversely correlated in at least ten years. Finally, with respect to the dollar, there is little correlation with the S&P500. The current lack of correlation between the dollar and equity prices stands in stark contrast to the credit crisis and the bull market, when the two had an extreme negative correlation. Today, equities are being driven by more than just the dollar, indicating an environment driven by fundamentals and not just asset flows.
Republican lawmakers may have gotten a PR boost for their attempt to cut $60 billion out of the budget. The Treasury Department announced last week that the largest monthly deficit in history was created in February, at $222.5 billion, surpassing the previous record set last February at $220.9 billion. As bad as it seems, the news wasn't all bad, as revenues were up 8.6% and spending was only up 4%. That's a move in the right direction. The biggest concern we have, and the one lawmakers have the least control over is rising interest rates.
As reports of Japan?s nuclear crisis grew bleaker this week, Japan and the world continued to grapple with one of the country?s worst natural disasters. While fears are high, thus far, elevated radiation readings have not been recorded outside the government-imposed exclusion zone around the nuclear plant in Fukushima.
What the Heck is Going On???
In recent weeks, the capital markets have weathered a bout of volatility not seen for quite some time. What are the main causes and how does this volatility affect our strategies and your portfolios? While there are many flashpoints around the world, we will highlight the "Big 3" (Japan, the Middle East, and federal budget issues) that have made the most headlines, and those which we believe have had the greatest and most recent impact on volatility.
Uranimum/Nuclear ETF Holdings
Market Vectors has an ETF (NLR)that tracks the main uranium/nuclear stocks around the world.The ETF is down 16%. Theholdings in NLRcome from France, Canada, Japan, Australia, and the US. Below we highlight these holdings, and we includeeach stock's country of origin, weighting in the ETF, and performance overthe last week. The uranimumexploration and mining companies have been the ones gettinghit the hardest. Uranium Resources here inthe US is down the most of all the ETF's holdings at -42%. Canada's Hathor Exploration is down the second most, followed closely by Uranium One.
Could Gasoline Price Increases Affect the Economic Recovery?
The recent political uprisings in N. Africa have had a major impact on oil and gas pricing here in the U.S. Increases in energy prices have a negative impact on consumer disposable income and confidence, not just in the U.S but globally. When gasoline prices spiked in July 2008, consumer spending posted its biggest one month decline since September 2001. Higher energy prices also contribute to increases in the overall rate of inflation. These are risk factors in terms of sustaining our current economic recovery, bringing down unemployment, and continuing to drive growth in corporate earnings.
Japan Default Risk
This piece examines 5-year credit default swap prices for Japanese sovereign debt. As shown, there has been a small increase in default risk in the days since the earthquake and tsunami hit, but default risk is still below levels it was at in May 2010 and February 2009. At the moment, it costs $95 per year to insure $10,000 worth of Japanese sovereign debt for five years. Japan remains at the low end of default risk compared to other countries around the globe. With the resilient country fighting to get back on track, investors don't appear to be worried about Japans financial problems.
Asia Pacific: Economic Review February 2011
Asian economies recorded some of their best performance for the full year 2010. In particular, Southeast Asian nations witnessed a banner year, clocking their best performance in recent memory. However, although the full year record was exemplary, growth in the final months of 2010 began to cool off. While a rising currency continued to trouble export-based economies, inflation haunted almost all central banks in the region. Central banks, having to choose between raising interest rates and attracting foreign capital, opted to hike rates.
Americas: Economic Review February 2011
Rising energy prices, due to the political upheavals in the Middle East, are becoming the primary economic risk for the Americas region. While the subdued inflationary trends will provide banks leeway to hold interest rates, they may be forced to advance their rate hikes if prices rise at a faster rate. In contrast, several of the emerging economies are expected to slow down this year. These economies may see interest rates rising faster, which may slow their pace of expansion even more. Also, higher interest rates will likely keep their currencies stronger and may restrict export growth.
Middle East turmoil not yet a significant threat to the global economy
The political unrest spreading across the Middle East and the resultant disruptions to the regional economy are not considered very significant for the global economic prospects for this year. Though oil prices have reacted on fears of lower supplies from the region, there have been no actual disruptions so far and any perceptible deceleration in global economic growth is expected only if prices shoot up further. It is widely believed that, unless the agitations spread to the region?s major oil producers like Saudi Arabia, the prospect of a sustained upsurge in energy prices is limited.
Europe: Economic Review February 2011
Various data released in Feb. confirmed once again that the economic recovery in Europe is gaining momentum. Nevertheless, investor sentiment on the continent, and indeed everywhere in the world, remained largely subdued during the month due to the growing political uncertainty in the Middle East and N.Africa region. Since rising food, raw material, and crude oil prices have already pushed up inflation to worrying levels in most parts of Europe, the recent surge in oil prices amid the protests in Libya and some MiddleEastern countries eclipsed encouraging signals about the Euro-zone economy.
Middle East/Africa: Economic Review February 2011
With countries led by autocratic rulers marred by stagnation in the economy, high unemployment rates and poor human rights records, protests in the region sparked off in classic ?domino effect? style. With rumblings being heard from countries like Iran, Syria, Jordan, Yemen and Morocco. The economic repercussions of the protests and the unseating of these regimes are yet to be calculated. The first obvious impact would be on oil prices. With the entire world economy hinging on the oil rich Middle East, the seismic shift in the political landscape of the region will be monitored closely.
Turmoil in the Middle East: Should It Have Been Predicted?
The turmoil began, when a young Tunisian college graduate immolated himself on December 17 after being harassed by police as he attempted to sell fruit on the street. Some claim the vendor, Mohamed Bouazizi, did not have the money needed to bribe police officials to continue peddling and earn a living. He died on January 4, sparking deadly demonstrations and riots throughout Tunisia (now called the Jasmine Revolution) in protest of social and political issues in the country. And just 10 days later, on January 14, President Zine El Abidine Ben Ali was forced to step down after 23 years.
2011 Year-End Price Targets
Each week, Bloomberg surveys the head equity strategists at the major Wall Street firms for their year-end S&P 500 price targets. At the start of 2011, the average S&P 500 year-end price target for these strategists was 1,371. This would have resulted in a gain of 9.02%. Since the start of the year, five strategists have increased their year-end targets, Goldman Sachs , Barclays, Bank of Montreal, HSBC and UBS. These increases put the average year-end price target at 1,401, which would result in a gain of 11.40%. With a YTD gain of more than 5% already, the S&P 500 is nearly halfway there
Finding Low Risk Value in Today's Market
The investment environment is transitioning from a macro-driven, reflation environment into one where earnings drive performance. US companies are well positioned at this juncture and contrary to consumers and the government have come out of this crisis in good shape. Some commentators question the outlook for corporate profitability, arguing that profits are meanreverting and that they can only weaken. We disagree, however, we acknowledge that price pressures are now showing up in import prices, and companies will need to offset these costs with increased prices or improve their productivity
Are Emerging Markets Still
Political unrest in Egypt, Libya, and elsewhere in the Middle East, along with surging food prices around the world, has provided fresh reminders of the inherent risks of investing in emerging markets. Indeed, while the U.S. stock market has been inching steadily upward in recent months, emerging markets have been struggling. Year-to-date through February 28, the MSCI Emerging Markets Index is down -3.79%, while the S&P 500 Total Return Index has gained 5.88%.
January?s Employment Situation Report Generates More Questions than Answers
The conflicting trends in the January Employment Situation report has forced all labor market observers to wait for February?s report in hopes of discerning some clearer trends. Generally speaking, the underlying trends are positive, as we?ve shown using the JOLTS data. On the other hand, things are not nearly as strong as the .8 percentage point drop in the official unemployment rate over the past two months would suggest. And that rate will likely rise again in the short term before it begins a long-term trend back to levels consistent with full employment and a healthy economy.
2011 Outlook: Private Equity
As a result of the financial crisis, for the latter part of 2008 and all of 2009, very few new private equity transactions were completed and portfolio company monetization was minimal. However, the operating performance of existing private-equity portfolio companies was better than generally expected and investment returns were superior to public equity benchmarks. Although some of this outperformance can be attributed to the resistance of some private equity firms, we believe the majority of the outperformance was the result of effective cost cutting, cash conservation and debt reduction.
Responding to the Stubbornly Steep U.S. Treasury Yield Curve
Disciplined, active investment managers are constantly on the lookout for capital market extremes, which can provide value-adding opportunities for investors. One such market extreme has been developing in the U.S. Treasury market for the past three years, reaching historic levels in 2010 and earlier this year. We?re talking about the very wide, stubbornly persistent gap between short- and longer-maturity U.S. Treasury yields.
US and State Default Risk
The US stock market has been on a tear lately, but default risk for the country has remained stubbornly high. Granted, default risk for the US is very low compared to most countries, but it is currently near 1-year highs. Below is a chart highlighting US default risk using 5-year CDS (credit default swaps) price in Euros. While risk is nowhere near as high as it got during the financial crisis in late 2008 and early 2009, it is more than 100% higher than where it was in late 2009.
The Housing Market Remains a Weak Link in the Current Recovery
Recent data on single family home selling prices for the 20 largest metropolitan areas in the U.S. indicate that prices in most markets continue to decline. The monthly decline for the Case-Shiller Home Price Index was -0.5% in November, which marks the 5th consecutive monthly decline. So while other measures of our economy such as GDP growth (3.2% annualized increase for the fourth quarter of last year) or corporate profit growth continue to show solid progress, home prices?which are important in affecting consumer confidence and spending?continue to exhibit vestiges of deflation.
Odds for the 2012 Elections, Health Care Repeal, and an NFL Lockout
The current Intrade odds for the Democratic Party to maintain the Presidency in 2012 stand at 62.5%. The contract for Republicans to control the Senate after 2012 last traded at 69 (or 69% odds). The odds are 50/50 for which party will control the House after the next set of elections. Odds are at 12% for the Supreme Court to rule the individual mandate unconstitutional by October 31st, 2011.
Deconstructing the Current Inflation Conundrum
As the old saying goes: ?The best time to buy flood insurance is when the river is still running low.? We suggest not waiting until inflation pressures increase further before making sure you have some inflation insurance in your portfolio.
Fourth Quarter Letter
In spite of Bernanke?s objective to put a floor on asset prices, including equities, we remain conservatively positioned. Equity and credit markets appear overvalued. In addition, with the U.S. and most developed-market economies significantly more leveraged than in the last 50 years, economic growth will likely be more volatile. Further, many potential exogenous forces could negatively influence public markets: over-leveraged municipalities, the PIIGS, and continued issues in the US housing market to name a few. Finally, there is no evidence that monetary policy can create real growth.
World Bank Says Developing Countries Driving Global Growth
During the recent Great Recession, developing countries such as China and India played a key role in sustaining global economic growth, while developed economies struggled to cope with issues such as the subprime market meltdown, sovereign debt issues, and soaring unemployment numbers. In the coming years, developing nations will continue to play an increasingly important role in driving the global economy.
December?s Unemployment Report Masks Lingering Challenges
On January 7, the U.S. Bureau of Labor Statistics (BLS) issued its Employment Situation report for the month of December. On the surface, the news appeared very good: The national unemployment rate dropped 0.4% from 9.8% to 9.4%. That is the lowest rate of unemployment we?ve experienced in nearly two years (April 2009 was the last month unemployment that was under 9%). And nonfarm payroll employment increased in December by 103,000. However, financial markets reacted with some pessimism that day. Overall, the S&P 500 declined 0.2% while broader indices also registered slight declines.
Equity Investment Outlook
During the fourth quarter, the stock market staged a strong rally, reflecting both growing evidence of a sustained economic recovery and the reversal (thanks to the Republican victory in November) of the seriously anti-business tone in Washington. These two factors enabled investors to begin thinking not just of a recovery from the recent crisis and recession, but of a more sustainable and enduring expansion. As a result, they were able to bet on a longer stream of favorable corporate earnings.
Fixed Income Investment Outlook
As for our strategy, we continue on a steady course of balancing major risk aversion while opportunistically seeking returns. Although there are no longer any soft pitches like there were in late 2008 and early 2009, we feel that there are still enough bond issues from well-run companies that offer reasonable returns without going too far out on the risk or duration curves. We do not believe it is prudent to lower quality standards or to take excessive duration exposure at this time in order to increase returns. We believe there will be better opportunities for that in the future.
A Near Perfect Pair: The Markets and Obama
President Obama has quietly maintained his position as one of the equity market?s most well loved Presidents. As the data show, the 47.6% gain in the DJIA since he took office ranks as the third best first two years for any President since the start of the 21st Century (FDR 90.5% and Coolidge 52.6%). Whether or not you give the President credit for the market?s performance will undoubtedly depend on your political views, but strictly at face value, the numbers don?t lie.
Inflation a Growing Concern for Emerging Market Countries
As a group, emerging market countries have rebounded from the Great Recession in much better shape than developed economies. And driven by higher commodity prices, robust domestic consumption, and a growing middle class with buying power, the emerging market asset class appears poised for more growth heading into 2011. While investors have been focusing on the European debt crisis, however, many emerging market economies have been getting a little overheated from the rapid pace of growth, and inflationary fears are quietly becoming a daily reality.
Global Outlook and Strategy
After being challenged in November by renewed Eurozone sovereign debt concerns, global risk markets ended 2010 on a strong note. The key to the late-2010 and early-2011 optimism was the potential for the two biggest engines of global growth ? the US and Chinese economies ? to pull together this year.
A Rare and Dying Breed
Despite the rapid ascent of index funds and ETF investing during the past decade, we contend that carefully researched and selected active strategies offer the best opportunities for our clients to achieve their investment objectives while taking the least amount of risk possible. Our conviction is based on past experience, and our analysis of manager performance in the context of "active share", an objective new measure introduced by Yale School of Management's Cremers and Petajisto in a 2006 academic paper discussed below.
Not As bad As You Might Think: State Revenues Q3 2010
We found that compared to Q3 of 2009, 42 of the 50 states saw revenue increases in the third quarter while only eight saw declines. On the positive side, nine states saw their revenues increase by more than 10%, with Alabama leading the way. Looking at the list of states with declines, the more notable aspect of that list may be the notable names that are absent. California, Illinois, New Jersey, and New York are generally considered to be the states that have the worst finances, but of those four only New Jersey saw a decline in revenues during the quarter.
2011 Outlook: Fixed Income
Entering 2011, there is no shortage of potential issues that could ignite periods of extreme market volatility. While short-term market gyrations are unsettling for both novice and experienced investors alike, for the year as a whole, we believe the outlook for the economy and the fixed income market is generally positive. In particular, certain non-Treasury sectors have compelling fundamentals going into the New Year. In our opinion, these areas could benefit generally from an increased risk appetite, should investors seek incremental yields given a continued low interest rate environment.
Demographics and Sovereign Debt
Events surrounding what the press calls the European Sovereign Debt Crisis have been in the news for much of the past year. Unfortunately, this label masks an underlying major contributing factor: demographics. The combination of long life expectancies, relatively early retirement ages, generous retirement benefits and a shrinking base of workers to support the growing proportion of retirees in the population will put tremendous burdens on the budgets of these countries.
Encouraging Signs of Life from the U.S. Consumer
Early data from the start of the 2010 holiday shopping season indicate this could shape up to be the best year for consumer spending (and retailers) since 2005. Some have attributed this simply to consumer psychology based on pent-up demand and frustration after nearly three years of relative austerity. However, there are other indicators suggesting that consumer finances are at least on the mend.
'Shadow' NAVs for Money Funds Available
In January 2011, so-called "shadow" net asset values (NAVs) for money market funds (MMFs) will become available publicly for the first time. They will be posted by the SEC on their Web site 60 days after they are filed monthly with the commission by fund management companies, including American Century Investments(R). As one of the investment industry's MMF pioneers, American Century Investments supports the new regulations and manages five MMFs.
Results 1,901–1,950 of 2,129 found.