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tanglinboy
Elite |
05-Apr-2007 07:39
Yells: "hello!" |
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Where's billywows? | ||||||
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tanglinboy
Elite |
05-Apr-2007 07:21
Yells: "hello!" |
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Dow up 20 points last night |
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lg_6273
Elite |
04-Apr-2007 18:32
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Cheapest stocks in 20 years signal bull market Published April 4, 2007 THE US economy is slowing. Mortgage defaults are rising. And stocks are the cheapest in 20 years, a 'buy' signal for some of the world's biggest money managers. BlackRock Inc, Fisher Investments Inc and Schroders plc, which manage about US$1.4 trillion, say stocks are inexpensive relative to bonds. Profit of companies in the Standard & Poor's 500 Index, the benchmark for American equity, is growing faster than shares, and represents a yield of 6.53 per cent compared with 4.65 per cent for 10-year US Treasury notes. 'Earnings have chronically grown faster than stock prices. That is contributing to the oddity of no big corrections.' - Jim Paulsen, Wells Capital Management The gap - the widest since 1986, according to data compiled by Bloomberg - is encouraging investors because earnings forecasts indicate the US will keep growing, while bond yields show confidence that inflation will stay in check. 'I'm on the wildly optimistic side of things,' said Kenneth Fisher, who oversees about US$38 billion as chairman of Fisher Investments in Woodside, California. 'The economy is stronger than people think it is.' Mr Fisher's optimism held through the first quarter even as stocks posted the biggest weekly drop since 2003 in the period ended March 2. They retreated as much as 5.9 per cent from the S&P 500's six-year high on Feb 20. As many as 2.4 million Americans may lose their homes because of the collapse of sub-prime lenders and foreclosures, Mike Calhoun, president of the Center for Responsible Lending, a Durham, North Carolina-based non-profit group, testified to Congress last week. Lennar Corp, the biggest US homebuilder, reported a 73 per cent drop in first quarter profit and said it couldn't give a full-year forecast, two months after predicting this year would be as good or better than 2006. New Century Financial Corp, the second-biggest sub-prime lender, disclosed a criminal probe. The S&P 500 withstood a 1.1 per cent decline last week to eke out a 0.2 per cent gain for the quarter. The index has now advanced in seven of the last eight quarters. Stocks in Europe and Asia also rose for a third straight quarter. The Dow Jones Stoxx 600 Index added 2.5 per cent, while the Morgan Stanley Capital International Asia-Pacific Index advanced 2.9 per cent. Companies in the S&P 500 were forecast to earn US$92.76 per 'share' of the index as of March 30, providing an earnings yield of 6.53 per cent, analyst estimates compiled by Bloomberg show. That would be the highest since 1991 when compared with yields based on reported net income. Profit growth The 1.88 percentage-point advantage stocks yield over Treasuries is the biggest since at least 1986. The more stocks yield in profit compared with the interest on bonds, the cheaper shares become on a relative basis. This measure was cited by former chairman of the Federal Reserve Alan Greenspan in 1997 and is commonly known as the Fed model. 'Analysts have underestimated profit growth for S&P 500 members in 13 of the last 15 quarters, data compiled by Thomson Financial showed as of March 23. The valuation disparity is big enough that you want to make that relative bet,' said Robert Doll, who oversees US$1.1 trillion as chief investment officer at BlackRock in Plainsboro, New Jersey. 'Our view is: stay invested because the bull market is not over, because the economic cycle is not over,' said Mr Doll Some investors say the gap isn't enough to keep stocks rising in the face of increasing mortgage defaults, falling consumer confidence and slowing economic growth. 'The issues that we face for the consumer through the housing sector are real, and are going to drag on economic activity for some time,' said Wendell Perkins, who helps oversee US$1.6 billion at Johnson Asset Management in Racine, Wisconsin. 'You could easily end up with a negative year' for stocks. His US$152 million Johnson Family Large Cap Value Fund has beaten the S&P 500 for seven straight years. Global markets tumbled on Feb 27 after Mr Greenspan said the US may slip into recession this year. Since then, a meltdown in the sub-prime mortgage market for loans to borrowers with poor credit histories has heightened concern the housing slowdown will spill over to the broader economy and drag down stock prices. More than 30 lenders have halted operations, gone bankrupt or sought buyers in the past 12 months as defaults on sub-prime loans surged. Delinquencies on the loans reached a four-year high in the fourth quarter, the Mortgage Bankers Association said. Consumer confidence Concern about foreclosures pushed the Conference Board's index of consumer confidence last month down from a five-year high, while a private report showed home prices declined in January for the first time in at least six years. Economists at Morgan Stanley, Nomura Holdings and HSBC Holdings reduced their first-quarter US economic growth forecasts last week after a report on durable goods orders raised concern a decline in business spending was deepening. Morgan Stanley cut its estimate to 1.6 per cent from 2 per cent. The economy grew at an annual 2.5 per cent pace in the fourth quarter, the government said in its final revision last week. Johnson Asset's Mr Perkins agreed with Mr Greenspan's estimate that there is about a one-in-three chance of a US recession this year. Stock indexes may fall at least 10 per cent if that happened, Mr Perkins said. For BlackRock's Mr Doll, valuations are attractive enough to help keep the rally in US stocks from derailing. He cited the Fed model as one such measure. Mr Doll is also confident a slowdown caused by the housing slump will give the Fed more incentive to spur economic growth by cutting borrowing costs. He forecasts the S&P 500 will climb to 1,549 by year-end, implying a 9.2 per cent gain in 2007. The S&P 500 had the biggest weekly jump in four years, rising 3.5 per cent, after investors interpreted the Fed's statement on March 21 to mean the central bank's policy makers abandoned their bias toward raising US borrowing costs. The Fed dropped a reference to the potential for 'additional firming' in interest rates, language repeated since it ceased two years of increases in August. Last week, Fed chairman Ben S Bernanke clarified the central bank's position by saying that while inflation remains his main concern, 'a little more flexibility might be desirable' in monetary policy. Traders expect about a 60 per cent likelihood the Fed will cut its benchmark rate by a quarter-point to 5 per cent in August. The central bank has left its overnight lending rate at 5.25 per cent since August. According to the median forecast of 73 economists Bloomberg surveyed from March 1 to March 7, the Fed will cut its rate to 5 per cent in the fourth quarter. Jim Paulsen at Wells Capital Management is more bullish, saying stocks will advance even without rate cuts by the Fed. He credits the cheap valuations of shares for helping spur the latest rebound. The same reason has kept almost all retreats during the four-year rally from reaching 10 per cent, he said. A week before the bull market began in October 2002, shares of companies in the S&P 500 traded at 26.5 times reported profit. Now, the price-earnings ratio, or the inverse of the earnings yield, stands at 17.1 times. 'Earnings have chronically grown faster than stock prices,' said Mr Paulsen, who oversees US$175 billion as Wells Capital's chief investment strategist in Minneapolis. 'That is certainly contributing to the oddity of no big corrections.' He expects the S&P 500 may reach at least 1,600 this year, which represents a 13 per cent gain for 2007. - Bloomberg |
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bsiong
Supreme |
04-Apr-2007 07:59
Yells: "The Greatest Wealth is Health" |
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NEW YORK - Wall Street advanced in early trading Tuesday, as investors drew support from falling oil prices and showed optimism that reports on auto sales and pending home sales will not signal an abrupt halt in economic growth. Ford Motor Co., General Motors Corp., DaimlerChrysler AG and others are preparing to release March sales figures that could help give investors clues about consumer spending. GM, the nation's largest automaker, on Tuesday said its sales in China jumped 25 percent in the first quarter. With U.S. sales sluggish, looking overseas is seen as a key driver to sales. GM became China's biggest automaker in 2005 when it overtook Germany's Volkswagen AG. Wall Street was also relieved that oil prices -- which contribute to inflation -- started to fall as tensions between Britain and Iran eased. Prices have risen steadily since 15 British sailors and marines were detained March 23 by Iran, and the two nations are in discussions that appear to be bringing the sailors closer to being released. A barrel of light sweet crude fell 97 cents to $64.98 in electronic pre-opening trading on the New York Mercantile Exchange. Investors are also awaiting data on pending home sales, which could give them a better sense of whether the housing market is holding up despite the struggling subprime mortgage sector. On Monday, New Century Financial Corp. filed for insolvency protection -- the biggest mortgage lender to collapse in the slumping U.S. housing market. In the first hour of trading, the Dow Jones industrial average rose 66.07, or 0.53 percent, to 12,448.37. Broader stock indicators also rose. The Standard & Poor's 500 index was up 6.47, or 0.45 percent, at 1,431.02, and the Nasdaq composite index rose 15.47, or 0.64 percent, to 2,437.73. The Russell 2000 index of smaller companies was up 4.20, or 0.52 percent, at 807.42. Bonds were slightly lower ahead of the data, with the yield on the benchmark 10 year Treasury note at 4.65 percent, up from 4.64 percent late Monday. The dollar rose against other major currencies, while gold prices rose. In afternoon trading, Britain's FTSE 100 was up 0.38 percent, and France's CAC 40 was up 0.46 percent. In Frankfurt the DAX was up 63.03 points or 0.91 pct to 7,000.20. Ahead of the auto sales data, GM rose 26 cents to $31.09; Ford rose 5 cents to $8.14; and Daimler Chrysler fell $1.19 to $82.83. |
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tanglinboy
Elite |
04-Apr-2007 07:38
Yells: "hello!" |
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Dow is up 128 points last night!!! cheong today!! | ||||||
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daryl88
Member |
04-Apr-2007 00:19
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be ready for profit taking correction sometime soon. |
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goldcarps
Member |
03-Apr-2007 22:56
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DOW NOW > 120 POINTS !!! | ||||||
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shplayer
Elite |
03-Apr-2007 22:10
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Wow, DOW up > 100 pts. | ||||||
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tanglinboy
Elite |
03-Apr-2007 07:39
Yells: "hello!" |
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Oil at 7 months high but Dow seems not wavering leh. DOW +27.95 |
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bsiong
Supreme |
02-Apr-2007 23:56
Yells: "The Greatest Wealth is Health" |
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Oil prices at seven-month highs... |
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xoefxoef
Member |
02-Apr-2007 22:30
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iPunter
Supreme |
02-Apr-2007 22:13
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Now we await Billywows to herald in the goodies... :)
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xoefxoef
Member |
02-Apr-2007 22:13
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DOW JONES 12.380,11 0,21% NASDAQ 2.424,89 0,13% | ||||||
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tanglinboy
Elite |
02-Apr-2007 22:11
Yells: "hello!" |
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Dow opens down.... | ||||||
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xoefxoef
Member |
02-Apr-2007 22:09
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14:00 US ECON: ISM Slows to 50.9, Prices Jump 6.5 Index Points] Boston, April 2. Factory activity expanded again in March but at a slower pace than in February and well below IFR's estimate. The March manufacturing activity index slipped to 50.9 in March from 52.3 in February against the IFR weekly survey's median forecast of 51.7 and IFR's own estimate of a jump to 55.0. Production and new orders fell well short of our expectations. We did not, however, build our estimate from the Chicago print but from an expectation that auto inventories had corrected enough to allow production to expand faster. More. - | ||||||
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chinkiasu
Master |
31-Mar-2007 11:48
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i think Ipunter, the scenario is going to change quite significantly with the latest US move against China... | ||||||
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iPunter
Supreme |
31-Mar-2007 08:33
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By all indications, the Dow is still 'undecisive'. |
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iPunter
Supreme |
31-Mar-2007 08:30
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By all indications, the Dow is still 'undecisive'. Whether the 'dead cat bounce will materialise is still pretty hard to tell. For it to be decisively assuring, and for the bears to be converted by an 'arm-twist', it must surpass the highs in the past days with a convincing upward 'spike'. If this happens, one can optimistically expect some 'cheong' action in subsequent sessions. On the other hand, any downward siginificant spiking in the next few sessions will almost certainly cause the bulls to lose heart and jitterily 'dump like crazy' again, thus making the current correction a deeper one. |
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bsiong
Supreme |
31-Mar-2007 00:00
Yells: "The Greatest Wealth is Health" |
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Dow vs. Oil |
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billywows
Elite |
30-Mar-2007 22:31
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