Flatter Yield Curve Makes Fed’s Job Harder – Rally In Financials In Limbo

Ten-year Treasury yields are not going along with the Fed’s tightening posture.  This could be because of a technical reason or yields could be sending an ominous message. Yields reached a historic low 1.34 percent last July, and have been … Continued

Lot Riding On 2H, Those Lofty Earnings Estimates Better Come Through

posted in: Economy, Equities, Technicals | 0

U.S. stocks have done phenomenally well since the February lows.  In less than six months through the intra-day high yesterday, the S&P 500 large cap index has rallied north of 20 percent, the Nasdaq 100 index 22.5 percent, and the … Continued

4-Session, 5-Percent Rally On S&P 500 Bodes Well, Will History Repeat Itself?

posted in: Credit, Economy, Equities, Technicals | 0

As far as U.S. stocks were concerned, Brexit was just a bad dream.  A footnote, so to speak.  On the S&P 500 large cap index, the intra-day high of 2113.32 in the session before Brexit hit stands, but last Friday’s … Continued

Amidst S&P 500’s 3.6% Fri Tumble, Looking For Signs Of Reversal N/T On Spot VIX

Last Friday, post-Brexit win, the 10-year Treasury yield declined 16 basis points to end the session at 1.58 percent.  It fell as low as 1.53 percent at one point during the session.  The drop ensured 10-year yields remained below support … Continued

Several Valuation Metrics On Way To Unwinding From Extended Levels?

posted in: Equities | 0

Last year, with the bull market in its seventh year, a June 19th post sought to find out where several valuation metrics stood.  The conclusion was that they were in uncharted territory.  With three more quarters of data since, a … Continued

Prudent Not To Take Lofty 2016/’17 SPX Operating Earnings Estimates At Face Value

posted in: Economy, Equities | 0

The S&P just published operating earnings estimates for S&P 500 companies for 2017, and it is an eye-catcher. Depending on one’s bias, reaction can range from ‘yee-haw’ to ‘not again’. The consensus expects a whopping $141.11. To put things into … Continued

Elevated Price To Sales Ratio, Plus Its Repercussions

posted in: Economy, Equities | 0

The price to sales ratio is an important valuation tool that many investors swear by. The market cap to GDP ratio – essentially a ratio of price to sales – supposedly is a favorite indicator of Warren Buffet. On this … Continued

Bulls And Bears Duel In Uncharted Territory

posted in: Credit, Economy, Equities | 0

We are in uncharted territory!  On so many levels.  As you will see in the charts below, many valuation metrics are stretched. The nation’s debt load just rose to a new high.  At 1Q15, the total credit market debt outstanding … Continued

Chair Yellen’s valuation concerns apt, as SPX operating earnings have probably peaked

posted in: Equities | 0

Chair Yellen brings up issue of “elevated” P/E and P/S ratios In 1996 and 2014, markets ignored Fed chiefs’ valuation warnings Tight R between SPX and operating earnings, which probably peaked in 3Q14 One of the nuggets in Federal Reserve … Continued