Salient to Investors: George Soros called on Europe to buy Italian and Spanish bonds, warning a failure by leaders meeting on June 28 to produce drastic measures could spell the end of the euro. Wayne Lin at Legg Mason says the EU summit won’t produce anything extraordinary, that Soros’ views are extreme, and expects more volatility.
READ MORE... →Salient to Investors: The cheap valuations of European banks, Japanese carmakers, Hong Kong developers and Russian oil producers are attracting investors, indicating that most investors are more concerned with preserving capital than earning higher returns. Shares with the lowest price-to-book ratios lost an average 10 percent since March 2012 and trailed the most expensive shares by
READ MORE... →Salient to Investors: Quantitative Equity Research reports that since 2004, stocks in the S&P 500 that pay dividends only outperformed stocks that neither pay dividends or buy back shares, which outperformed stocks that both pay dividends and buyback shares, which outperformed stocks that buyback shares only. The number of stocks that pay dividends only has
READ MORE... →Salient to Investors: Shanghai index down 6.8 percent since 2012 high on March 2, trades for 9.9 times estimated earnings versus five-year average of 17.8. Health-care stocks trade at 20.3 times estimated profit versus 10.9 for the CSI 300. Mao Sheng at Huaxi Securities says it’s difficult for stocks to rise with market liquidity. Gigi Chan
READ MORE... →Predictions: Templeton’s Mark Mobius sees emerging-market stocks in a sweet spot as Chinese economic growth remains buoyant and valuations plunge from historical averages, and is increasing holdings in China, Russia, Turkey, Thailand and Africa. Read the full article at http://www.bloomberg.com/news/2012-06-19/most-emerging-stocks-decline-on-europe-debt-crisis-oci-rallies.html
READ MORE... →Predictions: David Bianco of Deutsche Bank no longer expects a near term rally of 5 percent or more because of uncertainty about the Greek election, but maintained his year-end prediction of 1,475 on the S&P 500. David Trone of JMP Securities expects some of the largest financial institutions to underperform due to concern that Europe will experience significant damage. Michael Hartnett of Bank of
READ MORE... →Salient to Investors: Brown Brothers says the longest streak of alternating up and down days in the S&P 500 since October is a sign of a tug of war between bulls and bears. A lack of extreme pessimism during the market retreat since April suggests the market could go lower. BGC Partners says
READ MORE... →Salient to Investors: Bloomberg reports 64 percent of 108 S&P 500 companies had analyst ratings lowered in the past week. Investment Company Institute say American equity mutual funds had $7.2 billion of outflows during the week ended May 23 versus $178 billion of outflows in the previous 12 months. Predictions: Blackstone Group’s Byron Wien says it’s safe to
READ MORE... →Salient to Investors: Stocks in developed countries are being favored over emerging markets in the belief they provide a cushion during a weakening recovery. Keith Wirtz of Fifth Third Asset Management sees a shift to countries less reliant on mining and energy production. Eric Teal of First Citizens Bancshares said definitions of buy, sell and
READ MORE... →Salient to Investors: Equities may rebound: 5-month low in S&P 500 last week is similar to its 2011 low, as the 14-day relative strength index again stayed above lows. Predictions: BTIG said divergence of market lows and RSI is bullish for the next six weeks. Auerbach Grayson said the false breakdown below the 200-day moving average RSI divergence are
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