Results 2,001–2,050 of 2,106 found.
A 1 in 4 Chance We Say Bye-Bye to Blankfein?
For those wondering what the odds are for Lloyd Blankfein to depart as chief executive of Goldman Sachs, Intrade.com has you covered. The last trade on the Intrade contract for Blankfein to depart by December 31, 2010 was 25 (25 percent odds). The current bid/ask is 27/28, so the odds are slightly higher than one in four at this point. The contract started out at a higher price and has drifted lower over the past few days to its current level.
Financial Strains and Modest Gains for the Eurozone
The Eurozone fell into recession later than the U.S., and thus will recover later. European factories are heavily dependent on exports for growth. Investors should note that the global economic recovery and a stronger euro have been positive factors for the Eurozone's export machine. But with exports accounting for 35 percent of Eurozone GDP and half of that number going to other countries neighboring the Eurozone, major headwinds could soon be on the horizon.
Fixed Income Investment Outlook
The consensus is that we are well past the crisis point and will gradually see more economic sunshine. While Osterweis generally agrees, there are a couple factors that are prompting the firm to keep a conservative posture. In particular, they are concerned with China?s large trade surplus and the prospect of rising interest rates in the U.S. While the market may remain buoyant for some time as the economy recovers, Osterweis does not believe there is much opportunity cost at this time in taking a more conservative posture and waiting for the next good buying opportunity.
Equity Investment Outlook
During the first quarter, the stock market continued to work its way higher as evidence mounted that the economic recovery was solidly underway. While Osterweis is reasonably comfortable with the very near term outlook for the economy, it is quite concerned with the longer-term implications of the rising federal deficit, as well as about how the economy will perform as monetary and fiscal policy inevitability shift from maximum stimulus to a more neutral stance. The company, therefore, wants to focus its 'bets' more on individual companies than on broad macro-economic trends.
During the depths of the downturn a little over one year ago, many investors were quick to provide a lesson on the mathematics of loss. A 50 percent decline would require a subsequent 100 percent gain - not a 50 percent gain - to get back to even. Such truths, it seemed, were a justification for remaining bearish and a comfort perhaps to some, in making the painful decision to sell. Unfortunately, while the mathematics of loss is indeed an investing truth, it may also be an author of lies by suggesting that the only investor goal worth its salt is 'getting back to even.'
Republicans Now Favored to Take Back the House?
Intrade.com has contracts on whether the Republicans or Democrats will control the U.S. House of Representatives following the 2010 midterm elections. While the Democrats currently hold a large majority in the House, the odds for them retaining that majority after 2010 have been declining over the past year or so. As of today, the Republicans are now favored to win a majority in the House after the 2010 elections. The current odds based on Intrade's contract prices are 50.1 percent for a Republican majority and 45 percent for a Democratic majority.
U.S. Equity Quarterly Newsletter
The recovery in U.S. corporate earnings underpins the equity market's current valuation and offers scope for further upward movement over the coming quarters. In many respects the continued recovery in equity prices is likely to become self-fulfilling. As confidence in equities returns, investors are likely to move more money from cash and bonds, where they have parked it over the last 18 months, into equities. This in turn will push P/E's higher, which together with better earnings should offer investors good positive returns.
It's Census Time: Where in the World Are We Growing?
International population forecasts provided by the U.S. Census Bureau provide directional insights that can be useful to investors. The U.S. will continue to be a dynamic, growing and expanding country from a population perspective well into the 21st century. One implication is that we can deal with concerns over our rapidly growing government debt by growing out of the problem. In addition, despite the recent gloom caused by the housing bubble bursting, real estate values are likely to recover and continue growing long-term as a result of population growth.
Another Month, Another Huge Deficit
With total revenues of $153 billion and spending of nearly $219 billion, the federal government spent 43 percent more than it took in this month for its record 18th straight monthly deficit. Believe it or not, this month's $65 billion shortfall was the fourth-lowest over the last 12 months. When all is said and done, the total cost of the Troubled Asset Relief Program bailout is likely to reach $89 billion. When the federal government runs $65 billion in the red during its normal course of business, $89 billion to avert the collapse of the entire financial system doesn't seem so bad.
Sizing Up a Saw-Toothed Portrait of Potential Sustainability
A number of key leading indicators - including recent stock market performance, the expanding manufacturing sector, and the steep upward slope of the Treasury yield curve - point toward continued recovery. In addition, the unemployment rate, while still high, does not appear to be moving higher, and has in fact come down from its recent 10.1 percent high reached last October. History suggests that after an unemployment peak is attained, significant improvement follows soon afterward; there hasn't been a historical tendency for the unemployment rate to 'plateau' at levels near its peaks.
Don't Discount Dividends
During long and sustained bull markets, investors tend to overlook the importance of dividends in long-term wealth creation for equity investors. Benjamin Graham and David Dodd emphasized the importance of dividends in the overall valuation process for equities in a classic 1934 text. Because of their consistency in both good times and bad, dividends and dividend reinvestment can help cushion the downsides as well as enhance ultimate wealth. Investors, therefore, should not 'discount dividends.'
The Rising Cost of Commodities on the Consumer
The price of oil is up sharply today, and is trading above $86. While commodity traders love the rise in oil prices, consumers aren't nearly as enthusiastic, especially ahead of the summer driving season. To them, higher prices mean more pain at the pump, and in their wallets. Indeed, while low food and energy prices continue to serve as a rebate for consumers, that rebate has been dwindling since March 2009, and could soon turn into a tax, as they were from the beginning of 2008 through the summer of that year.
Corporate Cost Of Health Care: Announced Charges as of 3/31
Since Congress passed the health care reform bill on March 21st, we have seen numerous companies announce that they will take charges to earnings. The charges stem from one aspect of the legislation that eliminates deductions for tax-free subsidies companies receive from the government for providing prescription drug benefits to retirees. Due to the material and quantifiable impact that the bill will have on their business and financial results, the companies are required by law to disclose it. So far at least fourteen companies have announced charges totaling at least $1.6 billion.
Yield Curve Back Near Highs
With long-term interest rates rising and short-term interest rates contained, the rising yield curve is once again starting to receive attention. The Fed defines the yield curve as the difference in basis points between the yield on 10-year and 3-month U.S. Treasury bonds. High values in the yield curve are positive for the economy, while an inverted yield curve is a harbinger of weakness. The curve is currently at the high end of its historical range, and has made multiple attempts to break through the 380 bps level in the current period.
China's 2010 Growth Forecasts Upgraded by the World Bank
The World Bank raised China's 2010 growth forecasts to 9.5 percent last week from the 8.7 percent projected in November, but also predicted that China's growth will slow somewhat in 2011, to 8.7 percent. It also recommended higher interest rates and a stronger currency for China amidst growing concerns over rising inflation and a property sector bubble. The Chinese government emphasized the need for structural reforms in recent presentations to the National People's Congress.
Barron's' Pension Warning Doesn't Change Our Pension Outlook
A recent Barron's magazine piece about unfunded public pension liabilities painted an otherwise solid bond sector with a broad negative brush. While pension liabilities are a serious problem for state and local governments, they are neither a new problem nor an immediate problem, and they are not the most pressing issue that municipalities face in the post-recession environment, according to American Century Investments credit research director David Moore. Despite unfunded pension liabilities, no state runs a serious risk of default on its general debt obligation.
Latest Unemployment Report Reveals the Growing Problem of the Long-Term Unemployed
Four out of 10 unemployed workers are designated as long-term unemployed, meaning that they have been seeking a job for at least six months. This rate exceeds any other since the 1940s. As we have evolved towards a service- and knowledge-based economy, people with at least an undergraduate degree have fared better both in terms of lower unemployment rates and higher wages. This trend has become even more pronounced during the recession that began in December 2007 relative to the past two periods of peak unemployment in June 1992 and 2003.
Headlines Fail to Derail Munis
Municipal bonds of all maturities enjoyed positive returns in February, outpacing their U.S. Treasury counterparts. Money market rates remain low, however, encouraging investors to move further out on the municipal curve to capture yield. While state and local governments continue to face fiscal challenges and worries over bond defaults, Moody's released an updated default rate study that continues to point to the relative safety of municipals.
What's Next for the High Yield Market
The economy can achieve 3 to 4 percent growth in 2010. This growth rate, along with low interest rates, should provide a favorable environment for riskier fixed income asset classes such as high yield. Corporate profit margins, cash flows and productivity are all near record levels relative to prior cycles, and balance sheets are relatively healthy. This puts companies in a good position to capitalize on the recovery. A strategy that balances high yield, equity, convertible and bank loan securities is prudent, given the anticipated investment environment.
Underwater in the Housing Market
The number of negative equity mortgages, situations where the borrower owes more on their mortgage than the current market value of the home they bought, increased substantially since the housing bubble burst in 2007. While these homeowners continue to make payments, there is a weak correlation between how badly their mortgages are underwater and foreclosure rates. This is also a problem because many middle and lower income people use their homes as their most important source of retirement savings. In addition, negative equity may diminish labor mobility at a time of high unemployment.
What Happened to Nanotech?
Nanotech was one of the next big things during the 2002-2007 bull market, but has faded in recent years. Stocks and ETFs related to nanotech lost investor interest, and the sector has seen a drop in news coverage. Unlike many crazes during the internet bubble, however, nanotech does serve a purpose. If the bull market continues, it will be interesting to see whether nanotech resurges.
Preferreds are Preferred
The ETF that tracks U.S. preferred stocks has soared to bull market highs in recent days. Preferred stocks fell more than common stocks during the 2007-2009 bear market, but since March 2, 2009, the iShares S&P U.S. Preferred Stock Index ETF is up 153 percent, while the S&P 500 is up 66 percent.
Intrade Odds for Obamacare to Become Law by 6/30/2010
The odds for Obamacare to become law by June 30, 2010 jumped to 60 percent on Intrade a few days ago after the president pushed for the Senate to use reconciliation to pass reform, a procedure that requires only 51 votes and cannot be filibustered. Before then, odds ranged from 30 to 35 percent.
Recommended Bond Allocation
Have analysts become more conservative, or will the recommended bond weighting continue to fall as the market goes up? Wall Street strategists currently recommend a 30.5 percent weighting in bonds. Before the run-up in treasury bonds during the financial crisis, the recommended bond weighting ranged between 15 and 20 percent. As bond prices rallied, strategists increased their recommended weighting. Bond prices peaked in December 2008, however, and have been drifting lower since the onset of the current bull market in stocks.
Eurozone's Economic Recovery Loses Steam in Fourth Quarter
Economic growth in the 16-country eurozone stalled in the fourth quarter of 2009, raising concerns about the durability of the region's nascent recovery. Output expanded just 0.4 percent on an annualized basis in the fourth quarter, down from 1.7 percent in the third quarter. Meanwhile, after negative growth in 2009, the world economy is projected to expand by 3.9 percent in 2010 and 4.3 percent in 2011. Asia and emerging markets will lead the charge, while advanced economies such as the eurozone will remain sluggish and dependent on government stimulus measures.
Stock Market Performance and Inflation
The world is awash in liquidity as a result of the recent financial crisis and subsequent risk of deflation. Many investors are concerned that this "cheap money" will result in rising inflation. Historical S&P 500 data suggests, however, that the highest price to earnings ratios occur when inflation is between 1 percent and 6 percent.
Where Do We Go From Here?
Investors are showing signs of uncertainty amidst uneven economic growth. The S&P 500 is down 5.64 percent from its peak on January 19. Alger thinks the market pause could go on until well into the second half of 2010, but predicts a significant rally in U.S. equities and a continuation of the bull market in 2011.
A Speeding Ticket
Most indices are down from their January highs. But this pull-back is more of a speeding ticket than a suspended license, and markets will soon be able to travel cautiously toward their destinations. This environment will favor investors with a focus on security selection, a strong research effort and unwavering valuation discipline.
Taxes Paid by the Highest-Paid Americans
A recent IRS report provides ammunition for both sides in the debate over whether the ultra-rich should pay higher taxes. The 400 top U.S. earners accounted for 2.1 percent of all taxes paid in 2007, up from 1.2 percent in 1997. They paid an average tax rate, however, of 16.6 percent, down from 24.2 percent ten years earlier. Their average income in 2007 was $137.9 million.
Sirius Breaks (Above) the Buck
Sirius XM Radio's stock broke the $1 mark for the first time since September 2008. Shares rose by 1,900% since trading for as low as five cents last February, and are up 80 percent since their low on December 22. An improving auto sector may be driving up share prices.
Growing Problems in the Residential Real Estate Market (Part 2)
The problem of growing housing delinquencies has spread to states not originally affected in the sub-prime crisis and to higher-quality prime mortgages as the nation?s unemployment rate has reached double-digit levels. This commentary looks at the failure to-date of policy initiatives intended to stem defaults, and at the range of possible future policies.
Historical S&P 500 Sector Weightings
Bespoke Investment Group reviews historical sector weightings in the S&P 500, and says the Technology currently has its highest allocation since the internet bubble burst in 2000, at 19.2 percent. Financials rank second at 14.4 percent after falling to 8.9 percent in March 2009. Consumer Staples still weigh bigger than the Consumer Discretionary sector as they have since 2007, but Consumer Discretionary could overtake Consumer Staples once again if the bull market continues.
Fixed Income Investment Outlook January 2010
Osterweis Capital Management says in its fixed income investment outlook that increased investor appetite for risk drove up prices of high-yield bonds, equities and other financial assets in 2009. Investors may want to avoid Treasury bonds and other underweight longer-dated assets in order to avoid the impact of a possible interest rate hike.
Equity Investment Outlook January 2010
In its equity investment outlook, Osterweis Capital Management says it expects the economy to continue expanding this year, but notes that it might face headwinds from a double dip in the housing market and an unwinding commercial real estate sector. Stocks recovered sharply last year in the face of expected profit recovery, but may but may suffer temporary setbacks if the economy disappoints.
Bespoke's Sports Illustrated Swimsuit Issue Indicator
Bespoke Investment Group says the appearance of American model Brooklyn Decker on the cover of this year's Sports Illustrated swimsuit issue may be a good sign for investors. The S&P 500 remained positive in 13 out of 16 years an American appeared on the cover since 1978 and posted average returns of 10.6 percent. It stayed positive in 12 out of 16 years an American did not appear on the cover, and posted average returns of 8.2 percent.
Growing Problems in the Residential Housing Market
American Century Investments says in its weekly market update that rapidly rising delinquencies and foreclosures on residential housing could soon eclipse unemployment as an object of focus for economists, policymakers and the public. Delinquencies on loans secured by one- to four-unit properties, including home equity lines of credit, have soared since the end of 2007 to approximately 10 percent of the total value of mortgages.
Tweedy Browne: Cautious in the Short Term, Optimistic in the Long Term
Robert Huebscher recaps a recent webinar by investment firm Tweedy Browne. The company's four managing partners explained their focus on downside risk, expressed a preference for high-quality dividend-payer stocks and noted their emphasis on developed markets rather than emerging markets. The partners said they were optimistic about recovery in the long term, but cautious about the short term.
Sovereign Debt Default Risk
Since the beginning of the year, sovereign default risk (measured by credit default swap prices) has risen for Portugal, France, Iceland, German and Australia. It's even risen for the US - by a greater percentage than for either Dubai or Greece.
Country Stock Market Performance
Worries about a few EU countries and the Euro currency have rattled global equity markets. Sovereign debt credit default swaps have been rising sharply for countries such as Greece and Portugal in recent days. Equity markets in Spain, Portugal, and Hungary are down more than 5% today alone. They highlight the year to date performance and performance since the 1/19 peak for the major equity markets of 81 countries around the world.
China's Strong GDP Up 10.7% in the Fourth Quarter, but is Inflation on the Horizon?
American Century looks at the sources of growth in the Chinese economy its future projected growth rate. Easy credit and stimulus measures are potentially leading to a real estate bubble and inflation. Exports from China grew in December, following 13 months of decline, and ??the world may have to continue to rely on China as the biggest engine of economic growth.?
Results 2,001–2,050 of 2,106 found.