With thanks to the eagle eyed Tracy Alloway, the year in asset class returns illustrated in shades of Deutsche Bank blue.
(Spoiler: not such a good year for gold, commodities, or A-Rod baseball cards). Read more
Arbitrary worry gauge alert! The S&P 500 has now fallen over 20 per cent since its April 29 high:
Tuesday, October 04, 2011 9:32:10 AM RTRS – S&P 500 .SPX ENTERS BEAR MARKET, DOWN MORE THAN 20 PCT FROM 2011 INTRADAY HIGH.DJI.IXIC.SPX
Not yet, but getting perilously close to triggering an emergency Markets Live session…
(That’s 2:55 pm, London time.)
The emergency Markets Live circuit breakers are tripping on Thursday. Read more
Monday’s WSJ gives lengthy treatment to the scramble among analysts to work out whether stocks are cheap considering the uncertainty about the path of US corporate earnings.
There’s plenty of disagreement among the sell-siders and cheapness is itself a hazy concept. Using the Shiller-based P/E ratio of comparing prices against historical earnings going back ten years, stocks would appear to be, if not too expensive, then nothing like a bargain either. But shift to projected earnings and ratios still look mighty appetising — though of course, much will depend on whether the “projected” bit turns out to be accurate. Read more
Strange, fast, markets. The S&P 500 closed at 1,172.53, up 53 points, or 4.74 per cent. That’s the biggest one day rise since 20 October, 2008. 10-year Treasury yields touched crisis lows. And the US dollar… don’t even ask.
The last time we checked in with Doug Cliggott, chief US equity strategist at Credit Suisse, he was joining us for the launch of US Markets Live in early March.
At the time he thought the market was modestly overvalued and had a year-end target for the S&P 500 of 1250. He worried that the combination of high oil prices and the impending end of QE2 would eventually pressure earnings multiples and lead to a pullback, and he was advising investors to “move up in size, up in quality and down in economic sensitivity.” Read more
US companies have announced share buy-backs at the fastest pace since the fall of Lehman Brothers as companies search for ways to put their record cash holdings to work in a still nascent economic recovery, reports the FT. Buy-backs announced by 24 US groups were $27.3bn last week, topping $26.5bn the previous week and the most in any week since September 2008, according to figures compiled by TrimTabs Investment Research.
Like a tapas bar owner in central Pamploma, FT Alphaville is well-attuned to bullish sounds.
2011 outlooks are accumulating in the Long Room, where you can sniff a strong whiff of qualified optimism for the year ahead. Even the hitherto pessimistic Goldman Sachs flared its nostrils a little this week. Read more
Oh, excellent. Visualizing Economics is starting a series of charts based on Robert Shiller’s historical data. Here is the first offering:
Wariness ahead of the US Federal Reserve’s next monetary policy decision on Tuesday has left many traders cautious in their purchase of risk in Monday’s market, the FT reports. US equity futures are up 0.4 per cent, suggesting Wall Street will remain stuck at the top of its recent relatively tight range. However, gold has pushed to a fresh nominal high, above $1,283 an ounce, in part on expectations of monetary easing from the Fed. While the Fed won’t help resolve investor uncertainty, the market is also digesting last week’s FX intervention by Japan, Reuters adds, with fears of a domino effect on other currency markets beyond the country.
Global equity funds saw outflows of $7bn in the last week as investors cut stocks from their portfolios and reallocated to bonds, Reuters reports. Data from EPFR Global showed that bond funds received inflows of $5.2bn — a robust, but slowing, rate amid recent terror over US economic numbers. US equity funds recorded the most outflows among developed market funds. Not the best news with the DJIA already having finished below 10,000 on Thursday, as the WSJ reports.
US stocks will open the week on the lookout for strong earnings and economic data, Reuters reports, with the S&P 500 testing out the technical level of 1,100 reached before Friday’s close. If the index can hold this level, the sell-off of spring may have ended, giving positive momentum to the market even as double-dip fears continue. Investors are indeed likely to be drawn back to equities as bonds mature and cash markets continue to show poor yield, says a buy-side analyst at Trader’s Narrative.
Citigroup shares rose 3.3 per cent in pre-market trade in New York on Monday after the bank reported a Q1 net income of $4.4bn. Profit from continuing operations came in at 14 cents per share.
Investors had expected the bank to break even in the quarter. Read more