Salient to Investors: The U.S. economy may be on the cusp of a pickup in productivity that will make it more difficult for the Fed to reduce unemployment. Corporate profits rose 6.5 percent in Q1 from a year ago, the smallest year-to-year gain since the recession ended in mid-2009. Predictions: Ellen Zentner at Nomura securities
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... →Salient to Investors: FedEx, regarded as an economic bellwether, predicted Q1 profit lower than analyst estimates. Barnes & Noble Q4 revenue trailed analysts’ estimates. Predictions: Tom Wirth of Chemung Canal Trust sees the risks easing slightly, but expects any market action should the Fed extend Operation Twist to be short-lived. Myles Zyblock of RBC Capital Markets says growing uncertainty – due to
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... →Salient to Investors: The Greek election bought Europe time without fixing the cleavages between the northern and southern Greek economies. Professor Niels Thygesen identifies eight clashes in economic philosophy between Germany and France. Predictions: Professor Paul de Grauwe expects Merkel to remain an incrementalist, temporarily pacifying markets until it is clear it is
READ MORE... →Salient to Investors: NorthCoast Asset Management says everyone is on the sidelines for fear the market will get hammered if Greece leaves the euro. Predictions: Jeffrey Saut of Raymond James sees another leg up in the stock market on the belief that the Fed is going to have to provide liquidity to prevent the U.S. dollar from rising substantially
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: Bank of America survey said optimism among global asset allocators has fallen back to the lows of autumn 2011:, equity holdings have been reduced to underweight for the first time in seven months, cash raised to the highest level since 2008 and third-highest level on record. Predictions: RBC Capital
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
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