S&P 500
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Current "Bull Market Monday" Trend Points the Way to Maximum Market Profits
Call it the "Bull Market Monday" syndrome.
In fact, if weren't for the last month and a half of Mondays, the U.S. stock market would be a very dour place right now.
Since the start of the 2009 fourth quarter, the Standard & Poor's 500 Index has posted positive returns on 14 of the last 16 Mondays, with an average gain of 0.85% on that first day of the week (See accompanying graphic), the Bespoke Investment Group said in a research report last week. -
Why Fourth Quarter Earnings Season Will Bode Well for Stocks
As earnings season kicks into high gear in the coming weeks, many analysts expect an abundance of good news, mostly because earnings last year were abnormally low. And that bodes well for investors.
For the first time since the second quarter of 2007, earnings of stocks in the Standard & Poor's 500 Index should be higher than they were the year before. That would break the longest losing streak since S&P began keeping track of operating earnings in 1991.
"It's going to be on the plus side again," James Swanson, chief investment strategist at MFS Investment Management told The Wall Street Journal.
In fact, operating earnings for a group of companies selected by Thomson Reuters are expected to nearly triple on a year-to-year basis, mostly because of unfavorable conditions in 2008, when financial companies lost $81 billion in the fourth quarter. -
U.S. Stocks Will Reward Optimistic Investors in 2010
I have been surprised to see the air thick with pessimism in recent weeks. Not so much the stock market, where the sentiment indexes show the bulls dominating the bears by slightly more than 52%. But among the general public.
An NBC/Wall Street Journal poll last week found that 55% of all Americans feel the nation is heading the wrong direction. This is the highest level since January of this year - when the financial crisis was red hot and U.S. President Barack Obama was just entering the White House! That's amazing.
A recent CNBC "Wealth in America" report found more negativity. Negative sentiments were expressed about the economy, stocks, home values, and wage growth. Faith in institutions like the U.S. Federal Reserve, the U.S. Treasury, and the financial sector were very low. President Obama's approval rating has fallen below 50% for the first time.
However, Merrill Lynch & Co. Inc. researchers picked up on this theme, and said in a recent note to clients that 2010 would be the year we exit the "pessimism bubble."
And I couldn't agree more. In fact, there might not be a better time to buy stocks. -
Corporate Share-Buyback Programs Will Accelerate in 2010, Bringing More Profit Opportunity
The number of companies buying back their own stock has surged since slipping to the lowest level in more than a decade in the second quarter of 2009. That trend is likely to accelerate in 2010, which is a bullish sign for both the economy and stock market.
Stock buybacks among companies in the Standard & Poor's 500 Index totaled $34.8 billion in the third quarter of 2009, according to Standard & Poor's Financial Services LLC. That's a 43.8% increase from $24.2 billion spent on share buybacks in the second quarter, which was the smallest amount spent since early 1998.
In spite of the bounce, however, third-quarter share buyback totals represented a 61.2% decline from $89.7 billion in the same period a year ago, and a 79.7% drop from the record $172.0 billion corporations spent in the third quarter of 2007. But for many analysts the turnaround is a major milestone for the economic recovery. -
GDP Revised Lower For Third Quarter, Sets Stage For Slow Growth in 2010
The U.S. economy expanded at a slower rate than expected in the third quarter, but reductions in corporate spending and inventories have set the stage for continued growth of gross domestic product (GDP) in 2010.
GDP, a broad measure of economic activity, rose at a 2.2% annual rate from July through September, the Commerce Department reported yesterday (Tuesday), compared to a 2.8% gain in its previous estimate.
The new figure was below the 2.8% median estimate of 73 economists in a Bloomberg News survey, and significantly below the government's initial estimate of 3.5%. The GDP report is the third and final for the quarter.
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Markman on the Markets: Historic Bull Run in Bonds Points to Higher Prices for U.S. Stocks
A sluggish month in the stock market has equity investors worrying about what's next.
But those equity investors would feel so much better if they'd just spend a little time studying the credit markets. And with good reason: The bull market in credit that continues to rage in the face of this stock-market lethargy leads us to one simple conclusion.
Stock prices have to head higher.
Indeed, independent analyst Brian Reynolds tells us that if stocks were trading at the same level as credit, the Standard & Poor's 500 Index would already be at 1,350 - 22% above where it closed on Friday.
For those who argue that the market has already rallied a great deal, or too much, let me just note that the S&P 500 would have to rise by another 41% just to get back to the level of three years ago. The key thing that bulls have in their back pocket is that investors are still trying to get used to the idea that the sky hasn't fallen - and have not yet priced in the prospects for a 25% increase in S&P 500 profits that we are likely to see in 2010.
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Two Sentiment Indicators Investors Should Watch
Want to get an edge on the market? Sentiment might be a good place to look. Sentiment tells you how the majority of investors are positioned in a particular market, giving you clues about the next short-term move. Most of the time, it's an exercise in futility. The bulls and bears are about equally balanced, [...]
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Here's Why the U.S. Rebound Will Be Stronger Than You Thinkcom
The U.S. economy may be experiencing a "V-shaped" economic rebound. But it's not the conventional V-shaped rebound – where the two sides are about even. We may actually be looking at an extended rebound in which the right (recovery) side of the "V" extends way up high, like a checkmark. Since that is way out [...]
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Will Rise In September Retail Sales Carry Into Holidays?
Retail sales rose in September for the first time in 13 months, fueling hopes that the worst is behind retailers that head into the holiday season better prepared for a tough economic environment. Three reports were unanimous that sales gained, but to different degrees: Market research firm Retail Metrics Inc. said sales rose 1.1% last [...]
