Research & Market Insights Market Insights

05.22 2009

Is The Rally Over?

Is the monster rally that took the S&P 500 up 39% from the March 9th low to its 2009 high of 929 on May 8th over?  Recent market action is clearly warning that a near-term top may be at hand.  Look at the chart of the S&P 500 below.  The red circles indicate a “double-top”…

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05.15 2009

Free Market Capitalism?

Last week, I mentioned that a fair market value for the S&P 500 was around the 900 level, based on $60 of earnings in 2010 and a price-to-earnings multiple of 15 times.  However, I suggested that the multiple of 15 times earnings might be too high, meaning that earnings need to surprise to the upside…

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05.10 2009

All Clear Signal?

Stock markets worldwide extended the monster bear market rally last week amid a favorable response to the bank stress tests and better than expected employment numbers.  After a 40% rise in equities since March 9th, many believe the bear market is over.  So has the market issued the all clear signal? While huge government stimulus,…

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04.20 2009

Stocks Get a Dose of Reality

After a six week rally that took the S&P 500 up 28.5% from the March 9 bear market low, stocks endured a 4% selloff on Monday.  Financial stocks led the decline, as Bank of America’s earnings report and concerns over upcoming results of the bank stress tests sparked an 11% loss in the S&P Financials…

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04.13 2009

Market Update – April 13, 2009

The current bear market rally (or new bull market, if you appear on television), continues.  For the fifth consecutive week, stocks finished higher.  As of today’s close, the S&P 500 has shot up 27% in 25 trading sessions, a buying panic sparked by a string of news that is “less bad”.  Last week’s positive surprise…

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03.28 2009

Market Update – March 29, 2009

As winter slowly gives way to spring, a positive change in confidence among investors has quickly emerged.  Equity markets are enjoying a strong relief rally on a pace that is the fastest since 1938.  In the 13 trading days since the S&P 500 Index closed at a new bear market low of 676 on March…

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03.01 2009

Weekly Market Update – March 2, 2009

The S&P 500 Index broke to a new bear market low on Friday as the U.S. government took a 36% equity stake in Citigroup, and an updated GDP report showed the U.S. economy contracted at a stunning 6.2% annual rate in the fourth quarter of 2009.  The decline on Friday was the ninth in ten…

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02.22 2009

Weekly Market Update – February 22, 2009

Increasing fears that the U.S. government will soon move to nationalize some of the country’s largest banks drove stocks to near their November lows.  The Dow Jones Industrial Average, at 7,365, now sits nearly 200 points below its November 20 low, and many foreign stock markets reached new lows last week.  The S&P 500 is…

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02.09 2009

Weekly Market Update – February 9, 2009

In the face of a string of troubling economic news, stocks enjoyed a strong rally last week in anticipation of the new Administration’s upcoming plan to address the financial crisis.  The NASDAQ led equity market performance with an 8% gain, with much of that earned following downbeat comments by Cisco Systems on Wednesday (Cisco finished…

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02.02 2009

Weekly Market Update – February 2, 2009

The first estimate of U.S. Gross Domestic Product for the fourth quarter of 2008 shows the economy fell off a cliff in the aftermath of the Lehman Brothers failure in September. Real GDP declined at a 3.8% annual rate in the quarter, which is the worst performance since 1982. This is a rapid deceleration in…

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