S&P 500 1,086.20 -1.38%
Click here for the Weekly Wrap by Briefing.com.
Bottom Line: Overall, last week was not very good for the Bulls. The NASDAQ advance/decline line continued to deteriorate, technical damage spread, most good news went unrewarded, the Put/Call and Arms readings fell and energy prices rose. However, there were a few positives last week. The Financials rose, AAII % Bulls fell, the VIX increased and most commodities declined in price. As well, according to Thomson, companies boosted earnings by an estimated 24% in the second quarter, above the 19% estimate heading into earnings season. Moreover, only 11.0% of companies have missed estimates so far. Thomson also estimates earnings will increase a robust 15.3% in the second half of the year. The S&P 500's 04 estimated P/E is now 16.51, down 68.0% from its peak. This very reasonable valuation is also 24.2% lower than in 1992 and 11.5% lower than in 1987, years proceeding major bulls moves. Considering interest rates are still near historic lows, inflation is below its long-term average, the high level of U.S. economic and military leadership, economic growth near 20-year highs, record-high American net-worth, one could argue that stocks are actually cheap at current levels.
No comments:
Post a Comment