Below is the sector weightings of the S&P 500. Amazon is included in Consumer Discretionary, we believe it is misclassified and should be in Technology, if so, Technology is about 27% of the S&P 500. That is a very high level, not far below the weighting at the end of the technology bubble in 2000….
The S&P 500 is currently valued at 20.6x 2017 earnings, and 18.4x 2018 earnings. Obviously, after almost 9 years of a strong bull market, valuations are stretched. Putting on our rose colored glasses, you could make a case, (although the Federal Reserve is taking away the punch bowl), that the forward P/E multiple is fine…
The tax bill looks like it will pass this week. We will stress that it is a really good bill for U.S. companies that do most of their business in the U.S. These companies generally have high tax brackets, like retailers and banks. It clearly benefits value stocks over growth stocks. Please click the link…
This week, the Federal Reserve meets, and it is highly anticipated that they will increase the Federal Funds rate an additional .25% to 1.5%. The current rate will still be below the rate of inflation, which we believe is tracking right at around 2%. Please click the link below to continue reading: Market in a…
As we mentioned last week, the markets were very dependent on getting the tax bill passed. Both the House and now the Senate have passed their versions of the tax plan. We would expect during the week of December 18th to get a final bill through Congress. Please click the link below to continue reading:…
The Senate will vote on their version of the tax bill likely sometime this week. The market seems to have fully discounted the tax cut into the overall valuation of the market, but we believe that many sectors that will benefit from lower taxes have not reacted positively in a major way. Please click the…
One of the sentiment indicators we follow is the Consensus Bullish Sentiment Index. The index ranges from 0 to 100, with 25% and lower being oversold, or the sentiment being very negative and timely to make purchases of equities. Above 75%, the index is overbought and timely to sell. The current reading is very high…
Last week, the equity markets were down a little, concluding a streak of 8 consecutive weeks of positive returns. It has been over one year now since we had a 3% correction, well beyond the longest streak in history. Please click the link below to continue reading: Market in a Minute 2017-11-14
The earnings season has been brutal on companies that miss expectations by a little or maybe even meet expectations. It is odd for a company to report in-line and give guidance that is also in-line with expectations to have such negative reactions in their stock price. This is generally not a bullish indicator. The percentage…
It is rumored the House is pushing for a 5-year phase in of the tax plan. If this is truly fact, then the market has SIGNIFICANT downside risk. Also, the market is expecting President Trump to announce a new Chairman for the Federal Reserve on Thursday. Please click the link below to continue reading: Market…