In 2011, S&P 500 profits expanded 15%. And yet, the benchmark’s price finished in the very same place that it started the year. In essence, since prices flat-lined and earnings experienced double-digit growth, a fundamentally inexpensive stock market via the price-to-earnings ratio (P/E) became even cheaper.
The most common reason cited for P/E contraction in 2011? The Euro Zone debt crisis.
Obviously, sovereign [...] Continue Reading...
The prospects for corporate earnings haven’t mattered much to the markets in 2011. Instead, European debt news drives stocks dramatically higher or lower.
Last week, stock assets tanked on less-than-anticipated demand for Italian bonds. This week, stocks skyrocket on better-than-expected desire for Spanish bonds.
Traders used to profit from this kind of volatility. They haven’t been doing [...] 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 troubles in Italy, Portugal and Greece are shockingly serious. How serious? Many insist that these 3 little piggies will eventually succumb to disorderly bankrupties, causing Armageddon for world stock markets and the global financial system.
For the doomsday crowd to be right, however, everything has to go wrong. Ev-er-y-thing!
For instance, coordinated Eurozone plans for aid to Greece would have [...] Continue Reading...
Motivational speakers frequently explain that the Chinese word for “crisis,” or “wei-ji,” represents a combination of “danger” (wei-xian) and “opportunity” (ji-hui). That said, how much opportunity can be found in crisis after catastrophe after calamity?
For instance, the PIGS (Portugal, Italy, Greece, Spain) have been responsible for staggering levels of market volatility for 24 months. Time and again, one or more [...] Continue Reading...
The weight of the health care sector in a given ETF can vary dramatically. In the S&P 500 SPDR Trust (SPY), health care accounts for about 12%. In contrast, First Trust Dividend (FDL) commits roughly 30% to the segment.
Naturally, there are specific sector and sub-sector funds that provide 100% exposure. There’s 100% health care for the broader S&P 500 SPDR Select Health [...] Continue Reading...
Abbott Laboratories (ABT) sports 5-year dividend growth of nearly 10% as well as a 3.5%+ annualized yield. Eli Lilly (LLY) has a P/E of 9, a 5.3% dividend yield and 3-years earnings growth of 19%. Meanwhile, AstraZeneca PLC (AZN) has a mammoth 35% trailing return on equity with a 5.8% annual dividend payout.
How in the world are investors [...] Continue Reading...
Are you wondering if the market can go significantly higher by year end? Maybe your question should take the U.S. market’s remarkable resilience into account.
Specifically, the S&P 500 has not closed in bear market territory. In fact, the large-cap barometer would have to close below 1096 to get there. Yet, with the exception of a few scary moments, the gauge has demonstrated its [...] 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...
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...
