Despite Record S&P 500 Dividends, Yield Stagnant But Better Than 10-Year T-Yield

posted in: Credit, Economy, Equities | 0

S&P 500 companies are doling out record dividends.  Because the index has rallied massively, the dividend yield continues to linger around two percent.  This is still better than what the long end of the sovereign bond market is yielding, helping … Continued

Risks Growing Lagging Small-Caps End Up Pulling Leading Large-Caps Lower

Markets have been in dichotomy, with large-caps leading and small-caps lagging.  Bulls were hoping the former would pull the latter along.  But risks are rising things will evolve the opposite way.  It is early, but subtle signs of fatigue are … Continued

US Corporations Splurge On Dividends/Buybacks, Cash Cushion Likely Shrinks Ahead

posted in: Uncategorized | 0

US companies are sitting on tons of cash, and are also spending tons in dividends and buybacks.  As they continue to pay back shareholders, debt load – rising – moves front and center. S&P 500 buybacks shot up to new … Continued

Potential Fuel For Rally Is There, But Bulls Unable To Make Fullest Possible Use Of Short Interest

posted in: Equities | 0

If there was any doubt that short interest played a key role in the rally since September 29th, the latest short interest data should settle it. That said, since short interest remains elevated, the debate is still open as to … 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

Rare for U.S. corporate profits to drop during expansion — what to make of 2014 drop?

posted in: Economy, Equities | 0

U.S. corporate profits down in 2014, but not S&P 500 earnings Since ’46, corporate profits have only dropped 4 times during expansion Twice since 1989, corporate profits fell but not SPX earnings, latter fell following year  U.S. corporate profits were down … Continued

FOMC will probably dictate next big move for dollar index

Dollar index signaling it is ready to at least pause? Stronger $ will adversely impact both exports and earnings Fed can ill afford to send hawkish signal post-FOMC on Wednesday Over the past three sessions, this is how the U.S. … Continued

‘Buy the dips’ in process of transitioning into ‘sell the rallies’?

’15 growth in revenue/earnings expected to decelerate for most S&P 500 sectors Signal from options market points to probable pressure ahead for equities S&P 500 looks set to at least test if recent breakout was genuine At first glance, U.S. … 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