Salient to Investors: Analysing what parts of the market have lots of ground to make up to reclaim highs is a good way to gauge how much more the market can rise or fall. The NYSE Arca Airline Index is 59 percent below its peak. The S&P 500 Information Technology
READ MORE... →Salient to Investors: Jan Hatzius at Goldman Sachs said: There is little evidence of the “pent-up wage deflation” that Yellen cites as a possible reason behind the slow increase in earnings and says the opposite was true, with the areas having below-average wage growth during the recession now showing above-average
READ MORE... →Salient to Investors: Currency trading suggests traders are dismissing the prospect of an upset “yes” in the September 18 referendum on Scottish independence. Strategists say the pound’s peaks and troughs in 2014 reflect the prospect of the BOE becoming one of the first major central banks to raise rates. Geoffrey Yu
READ MORE... →Salient to Investors: The value of equities globally is at a record $66 trillion versus $25 trillion in March 2009 and $63 trillion at the 2007 peak. The US stock rally is approaching the dot-com bubble in terms of speed, but not in valuations – at 16.8x estimated earnings versus 26x at
READ MORE... →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: Warren Buffett says no business has ever failed with happy customers and said in 2012 that more people will be drinking Coca-Cola 10 years from now, or chewing Wrigley’s gum. Suzie Buffett said her father’s food investments mirror his tastes. Tony Scherrer at Smead Capital Mgmt said Warren
READ MORE... →Salient to Investors: Mary Daly and Bart Hobijn at FRB San Francisco said during and after the 2007 recession employers left wages higher than they normally would be after a severe downturn so may not now have to offer increases to attract workers as the job market improves. They said
READ MORE... →Salient to Investors: Thomas Simons at Jefferies said new-home sales have no traction whatsoever but overall housing data is encouraging, with everything moving in the right direction, though a little more slowly. New-home sales are tabulated when contracts are signed, and so are a more timely barometer than transactions on existing homes.
READ MORE... →Salient to Investors: Fareed Zakaria said: ISIS is the most significant terrorist organization we have ever faced, becoming what al Qaeda always wanted to be – ISIS is developing a very large, deep and sophisticated base with the ability to sell oil and wheat at a bargain. Mao Tse Tung
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
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