Salient to Investors: Banks, brokers and insurance companies make up 16.8 percent of the S&P 500, almost double the level from 2009 and versus tech companies at 17.6 percent. Banks were the largest US industry during the bull market that began in 2002, and financial firms grew to 18.8 percent of the index in
READ MORE... →Salient to Investors: The Weitz Value and Weitz Partners Value funds each have cash stakes close to 30 percent. The Yacktman Focused fund has 19 percent in cash. The Westwood Income Opportunity fund has 16 percent in cash, The IVA Worldwide Fund has 28 percent in cash, the GoodHaven fund has 33 percent in cash. Morninstar
READ MORE... →Salient to Investors: The S&P 500 Index’s advance to a record last week coincided with highs in the Russell 2000, the Dow Jones Transports, the S&P 500 Financials and Morgan Stanley’s gauge of economically sensitive equities. During the 4 biggest bull markets of the last 25 years, peaks in those indexes have come before the S&P
READ MORE... →Salient to Investors: Earnings: 73% of 103 S&P 500 companies so far reporting have beaten estimates 53% have beaten revenue estimates. 80% of S&P 500 financial companies have beaten estimates by an average of 8.7%. Banks and insurers are predicted to report earnings growth of 26% this quarter. Excluding financial
READ MORE... →Salient to Investors: 17 S&P 500 tech companies so far reporting have missed estimates by an average 3.6 percent. Analysts predict the group will report a 6.7 percent decline in profit versus a predicted 2 percent increase for the S&P 500 as a whole. 72 percent of S&P 500 members
READ MORE... →Salient to Investors: The Fed’s mixed messages on monetary policy are stoking volatility in the currency market, raising the odds that companies will have a harder time setting up exchange-rate hedges designed to protect overseas earnings. Ulrich Leuchtmann at Commerzbank said if a high-volatility environment were permanent it would cause problems when
READ MORE... →Salient to Investors: Rick Fier at Conifer Securities said Bernanke’s message that tapering is coming, the economy is improving, and rates will be low for a time is taking hold in the market, and with better than expected initial jobless claims and OK earnings its hard not to be bullish. The S&P
READ MORE... →Salient to Investors: Matthew Crews at Smith Patrick Financial Advisors writes: The combination of a high CAPE valuation and above-trend earnings is bearish. Either earnings growth will rebound, or more likely market valuations will compress. The market expects a strong rebound in earnings in half2, 2013. More likely is downward
READ MORE... →Salient to Investors: Street Authority writes: The AAII survey shows less than 20% of investors are bearish, the lowest reading in 18 months. Stocks tend to rally when the AAII survey finds few bullish investors. Technical indicators including momentum and not fundamental indicators like valuations and growth rates are driving the
READ MORE... →Salient to Investors: Argutori writes: The financial markets are due for a correction. Volatility in the financial markets will spike before the end of 2013 because: Volatility can’t go much lower. Historically, when the VIX has dropped below 15 the S&P 500 tends to fall as well. Over the past
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