Salient to Investors: The market looks more and more like the dot-com bubble market except for valuations: 19x now versus near 30x then. Widespread gains now compare with the concentration in computer shares back then. The S&P 500 Equal Weight Index has risen at an annualized 28% rate since 2009,
READ MORE... →Salient to Investors: Diane Vazza et al at S&P said: The US distress ratio of bonds is at 5.4% versus the 3-year low of 4.7% in May. A rising distress ratio is typically a precursor to more defaults when accompanied by a severe and sustained market disruption. Read the full article at http://www.bloomberg.com/news/2014-08-22/risk-of-defaults-in-distressed-debt-is-climbing-s-p-says.html
READ MORE... →Salient to Investors: Barry Ritholtz writes: Rarely have conditions for market gains been so promising at a time when investor psychology has been so negative. Only 7% in a Gallup poll were aware of the S&P 500’s 30% increase in 2013, while more than 50% would put new cash into
READ MORE... →Salient to Investors: The OMX Copenhagen 20 Index: Returned 21% (18% in US dollars) in 2014 including dividends – the best benchmark gain in 24 developed markets – versus 9.6% for the S&P 500. Returned 280% (299% in US dollars) including dividends since its low in March 2009 versus 229% for
READ MORE... →Salient to Investors: Todd Salamone at Schaeffer’s Investment Research said the Fed raising rates sooner than expected is still a big ‘if.’ The S&P 500 has not had a decline of 10 percent in almost 3 years and trades at 17.8 times reported earnings, near the highest level since 2010.
READ MORE... →Salient to Investors: Few businesses are large enough to merit Warren Buffett’s attention. Berkshire Hathaway spent a third of the total from a year earlier on equities in half1 2014, while sales of stock more than doubled. Buffett dislikes paying a dividend and rarely buys back shares. David Rolfe at Wedgewood Partners said Buffett’s list
READ MORE... →Salient to Investors: Flows into emerging-market ETFs have turned positive for the year, reversing outflows in the first 2 1/2 months of 2014. The most inflows in 2014 have gone to India-focused ETFs. Investors have withdrawn $1.5 billion from China-targeted ETPs over concern over economic imbalances there. The RSI of the BlackRock ETF
READ MORE... →Salient to Investors: The Russell 2000 VIX is up almost 11 percent in 2014 versus a 6.6 percent drop in the VIX and at its highest level since 2006 relative to the VIX. Russell Rhoads at CBOE’s Options Institute said the premium indicates we would get a bigger pullback in small-caps than large-caps in a market
READ MORE... →Salient to Investors: Jeremy Grantham said: The stock market is expensive and headed for a bubble at S&P 500 above 2250, and offers paltry returns for years to come. Expect an explosion of M&As to record numbers due to cheaper debt in this cycle, profit margins that will remain high, a still young
READ MORE... →Salient to Investors: Todd Lowenstein at Highmark Capital Mgmt said people are selling out of fear in a market that is really acute to geopolitical risk, given current valuations. John Canally at LPL Financial said markets have to determine if this is an escalation of the conflict. 60 percent of
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