Popular emerging markets in the BRIC configuration – Brazil, Russia, India, China – suffered through severe bear markets in 2011. Yet far too many writers attribute the 20%-33% declines to Europe’s sovereign debt crisis alone. It is true that the debt mess sent the U.S. dollar higher at the expense of the ruble, “real,” and the rupee. Contagion containment has also damaged the prospects for emerging market [...] Continue Reading...
On the first day of December, 2011, a number of brand name corporations hit new 52-week highs. Here are a few that caught my eye: McDonalds (MCD), Phillip Morris (PM), Diageo (DEO), Kraft (KFT) and Treehouse Foods (THS). Keep in mind, most of the media attention centers on the discretionary spending of the consumer (e.g., “Black Friday” widescreens, ”Cyber Monday” acquisitions of [...] Continue Reading...
The Greek referendum notwithstanding, most economists and Federal Reserve members have taken note of modest economic improvements. And while the slow-growth, limited-job environ is far from ideal, it should be enough to foster the well-being of many ETF assets. Not convinced? Erratic price swings have shaken the olive out of your martini glass? Then opt for a simpler [...] Continue Reading...
In the 5-year bull market from 10/2002 through 9/2007, large-cap indexes typically carried price-to-earnings (P/E) ratios ranging from 17-18. Perma-bears harped on these “valuations” throughout the period, expressing that major benchmarks had not reverted back to a historical average of 15. With the real estate lending bubble bursting in dramatic fashion, stock assets plummeted 40%. Separately, the P/E price tag for the S&P [...] Continue Reading...
The number “88″ means a lot of different things to different people around the world. For some, it expresses the notion that the universe is both infinitely large and infinitely small. Others see it as a message of eternal love. Meanwhile, Chinese culture recognizes “8″ as its luckiest number, with “88″ symbolizing even greater fortunes. However, 8/8 is a rather dismal date for the [...] Continue Reading...
Euro-zone members have yet to come to a meaningful agreement on how to save weaker countries from sovereign debt defaults. Consequently, Germany has been studying the adverse impact that a default by Greece would have on German banks. Meanwhile, CEOs of French financial institutions can be seen on the talk circuit, claiming that banks in France are well-capitalized and [...] Continue Reading...
Forget the idea that the economy will contract in upcoming quarters… at least for a moment. And put aside the idea that housing prices have yet to bottom out. Instead, let’s focus entirely on the price movement of a premier benchmark in this year’s stock market correction. Specifically, U.S. stocks in the S&P 500 fell from a May 2 intra-day [...] Continue Reading...
How many articles are going to emphasize how bad the month of August treated investors? The fact that U.S. stocks in the S&P 500 shed -5.7% speaks for itself. On the other hand, the reality that August had been down as much -13.3% eight trading days earlier is far more telling. Ironically, you still read how the U.S. credit downgrade [...] Continue Reading...
Hurry! Hurry! Place your bets on the chances of another recession — 25%, 33%, 50%, 66%, 100%! How gloomy are some folks? Perma-bear David Rosenberg of Gluskin Sheff & Associates believes that a recession is a near certainty (99%), citing the weakness of the consumer and the double-dip in housing. Meanwhile, John Hussman, long-short billion dollar fund manager, expresses 100% certainty in [...] Continue Reading...
Nearly every investor would like to believe that Tuesday’s 300-point Dow performance was meaningful. In fact, with the SPDR S&P Gold Trust (GLD) shedding more than 3% in the single session — with the CBOE Volatility Index (VIX) falling close to 15% on the day – the Dow’s surge may have been legitimate. Still, you might not want [...] Continue Reading...
