Had a good laugh on Thursday when the talking heads on CNBC and their short parasite friends were telling us the market had gone too far and the economy is bulit on a house of cards by the FED's easy money policy.
While there was no growth last quarter, the clowns in Washington and Hurricane Sandy didn't help. As one economist put it, the December quarter was the strongest contraction he had ever seen.
For the glass is more than half full prospective consider this:
1. Of the 334 companies that have reported earnings to date for Q4 2012, 72% have
reported earnings above the mean estimate and 67% have reported revenues above the mean
estimate. Typically, 62% report earnings above the mean estimate.
2. The blended earnings growth rate for Q4 2012 is 3.0%.
3. The auto industry is expected to have another good year, growth in China is reviving and Europe appears to be bottoming.
4. More Companies Beating Revenue Estimates in Q4 (67%) Relative to Q3 (41%) and Q2 (41%).
5. Corporate cash is at record levels, $1.7 T. More and more companies are finally making plans to give some back to the shareholders, hello Apple!
6. Filing for new unemployment claims, is at its lowest levels in 5 years.
7. The Housing market has revived My daughter has been trying to buy a house in Northern Virginia for the past 6 months and keeps on getting out bid. Realtors are calling around in my $$$$ neighborhood asking if anyone wants to sell, prices up 20% over the past year.
8. Various stock market indices are hitting multiple year highs.
For the average American, rising housing values and the stock market are primary drivers of individal wealth.
The easily duped teabaggers who wanted to gut social security to create jobs missed a key point. There is are large bubble called the baby boomers getting ready to retire. Due to the recession knocking down their savings and uncertainty over social security, many have stayed in the work force or have made plans to work longer. Now with their 401Ks, etc coming back many may reconsider staying in the workforce if social security isn't monkeyed with, thereby opening up more jobs.
9. The current forward P/E on the SP500 is 13.4. Historically, the average forward P/E is around 15, with multiples in the high teens indicating over bought/market top. So, we have a ways to go on the rally. For the chart monkies out there, the recent close above 1510 on the SP500 is a breakout point at least to mid-1500s.
10. To my utter amazement, due to oil shale, natural gas, and other deposits the U.S. is expected to go from an energy importer to exporter by 2020. If true, this very BIG news!
Now if the nervous nellies posing as buysiders ever grow a set of cajoles, we could party like we did in 1982 when the DJI index went through 1,000 on the way to 14,000!
From my post on 2/9/13, with the SP500 at 1517, many thought we had gone to far, but I noted:
"The current forward P/E on the SP500 is 13.4. Historically, the average forward P/E is around 15, with multiples in the high teens indicating over bought/market top. So, we have a ways to go on the rally. For the chart monkies out there, the recent close above 1510 on the SP500 is a breakout point at least to mid-1500s. "
Some people come on these boards to show everyone what a SFB moron they are or to stalk other posters because of their own short givings and mental problems. but I know there are a few who, believe it or not, can actually find some value here occasionally.
Well, well, lwell, looks like Uncle Vikes made another great call.
Like all the other profitable calls I have made over the past 10 yeara, what do you want to bet that 98% of the morons, chart monkies, heggies, spammers, and village idiots who populate this board completely missed it. Too busy #$%$ away over me, Obama, the FED, insider selling, SSDs, etc.
ROFLMFAO, what a bunch of losers!
Now it's quite possible, if not probable, we will get a 3% to 5% correction next quarter as the cajoless PMs who missed the rally sit on their hands hoping for a correction. So, keep a few things in mind:
From a fundamental standpoint, these macro trends will power the bull market even higher:
1. Strong housing and energy markets, autos doing well, U.S. banks strongest shape in quite a while
2. Corporate profits and cash at or near record levels
3. The U.S. holds oil shale deposits, estimated at 1.7 trillion barrels, that are double the oil shale deposits of the rest of the world COMBINED. U.S. energy exporter by 2020 or before!
4. The rally is letting the baby boomers recoup their investment losses. If the dullard tea baggers don't mess with social security, many boomers will retire in next 5 years, easing unemployment.
5. Companies hold $1.7 trillion in cash. Many CEOs, including Cook at AAPL, are finally waking up and returning the cash to share holders.
6. Europe won't remain a basket case forever.
7. While FED will eventually raise rates, they still will be extremely low, up just 2% to 3%. .
From a technical standpoint:
1. History has shown that after the market sets a new record high, on average it gains another 28%
2. Consensus SP500 earnings for 2013 of $110 and $125.4 for 2014. Historic average P/E multiple on SP 500 is 15, yielding a 1800 target. FYI, at the peak of the bubble market in 1999, SP500 was trading at a P/E
of 29. So don't listen to those morons on CNBC who say we are at a another bubble, bunch of total idiots
3. Liquidity is fueling the rally.
Uh……wasn’t it just a week ago that Vikes strained a muscle patting himself on the back for a great call? Remember…it’s the economy Stupid….not the stock market.
From the Washington Post (not exactly a conservative publication):
This is a terrible, horrible, no-good, very bad jobs report.
“The 88,000 net jobs added in March, if that or a similar figure holds up through revisions, is a tragedy: Nearly four years into the economic recovery, with the unemployment rate still close to 8 percent, the nation recorded a month in which too few jobs were added to keep up with the growing American workforce (that number is more like 125,000). A whopping 496,000 people dropped out of the labor force, and 206,000 fewer people reported having a job, meaning that the proportion of Americans currently working actually ticked down, not up.”
Of course the democrats are already falsely blaming the sequestration. The federal government shed only 2,200 jobs.
“Which leaves us with this overarching conclusion: This economy isn’t as strong as we thought it was.”
“But while the Fed’s easing may provide some cushion, there are no two ways about it…..it may be back to the drawing board.”
So this may just be the catalyst for a 5-7% correction which may be a good thing overall. But while this jobs report may be the catalyst….it clear it wasn’t the robust economy driving the stock market. Don’t worry vikes….maybe Uncle Ben will give you QE Four, Five and Six….in an effort to prop up your false economy. LMAO again!
I agree you could have Warren Buffet posting on this board and most of numb nuts would ignore or harass him. I figure the harassers are nothing but SFB professional traders who can't make a buck unless some Analyst like JPM, Barclays, or GS, is shilling for the them or they get inside info.
1800 on the SP500 is a distinct possibility in 18 months if the Aholes in DC dont screw it up.
Yeah, I will have to tell my daughter how she and the other wealthy folks are responsible for the up tick in the DC housing market by trying to buy a 2 bedroom, 1100 square foot home.
Can you say Wacko?
First, the moron vikes begins by calling the economy stupid. LMAO
Second, in his first sentence he calls CNBC part of the vast evil nefarious criminal conspiracy of unknown entities involving evidently EVERYONE except vikes. LMAO
Thirdly, why vikes is busy guzzling the Obummer kool-aid of how wonderful everything really, he fails to mention a few key salient points. Points like MASSIVE obama fascist take-over of the US economy as quantified by huge increase of government spending as a percentage of the US economy. Points like MASSIVE obama communist debt as quantified by debt now being higher than US annual GDP. Points like MASSIVE obummer socialist printing of $85 BILLION every MONTH out of thin air and spending it.
Why go any further!!!!! Unless you truly like drinking suicidal kool-aid.
Vikes….you’re not under the false impression that the economy and stock market are related? Aren’t you the one who cries insistently about the manipulation in the stock market yet here you are telling everyone how rosy things are because the markets up?
The economy is built on a house of cards but we won’t likely see this collapse until 2015 or longer. The degree of collapse will depend on just how skillfully the fed can unwind their easy money policies. But there will be an impact….
“While there was no growth last quarter”…
Yes….there was no growth last quarter…..and the three prior quarters only combine for a 1.575% growth in the entirety of 2012. This follows a 2.0 GDP in 2011 and a 2.4 growth in 2010. This is the real story….growth is going down….not up. You can try to put lip stick on a pig but these are the facts and they’re a direct result of Obama’s policies.
“Of the 334 companies that have reported earnings to date for Q4 2012” (covers points 1,2 & 4. Why did you repeat points 1 & 4?)
While we have seen an up tick in earnings beats….this follows several quarters of reduced estimates and expectations. They haven’t exactly been setting the bar too high these days….and understandably so. Have you tracked how many of these same companies gave weak or flat guidance for this quarter? I didn’t think so.
“The auto industry is expected to have another good year”
The average age of cars now in use exceeds 10 years. This has more to do with consumers realizing they can not afford to put off buying a new auto rather than an improving economy. The low interest rates help this decision as well.
“Corporate cash is at record levels, $1.7 T.”
You failed to point out that most of this cash is overseas and would be subject to tax if returned to the US. A simple repatriation program could serve as an immediate stimulus but Obama won’t let this happen.
“Filing for new unemployment claims, is at its lowest levels in 5 years”
Wow…current claims dropped 5,000! But the unemployment rate tick back up to 7.9%.
I guess they could only tinker with the workforce figure so much before it becomes obvious to all it’s manipulated (just like your stock market).
“The Housing market has revived”
Yes…inventories are indeed better but all real estate is local. In California…delinquencies are close to 10%. The ability to qualify for a loan these days is out of the reach of many first time buyers. It will still be a couple of more years before we get near a normal housing market.
I agree on the domestic oil picture. This picture would be even better if Obama would approve drilling permits on federal land and allow more pipelines to be built. But of course he’s in the environmentalist pocket.
Uncle Ben’s policies are doing just what he intended…..driving investment dollars into riskier assets. But our economy is dependent on both Fiscal and Monetary policy. Poor Ben is flying a four engine jet on just two engines. Let’s hope he can land it without a terribly crash.
This is a lay up folks when you are dealing with a right wing nut case:
Runt on growth:
"Yes….there was no growth last quarter…..and the three prior quarters only combine for a 1.575% growth in the entirety of 2012"
The economy contracted 0.1% in the December quarter which as I noted was heavily influenced by the nonsense in Washington by your teabagger buds and Hurricane Sandy. In the preceding four quarters growth was 3.1%, 1.3%, 2.0%, and 4.1% for an average growth of 2.6%. It is also not unusal for the economy to slow in the first year after a Presidential election, GDP fell in 2008, 2004, 2000, and 1996. A number of firms indicated during their earnings calls that they expected strengthening in 2H13, which FYI is the reason the market indices are at record highs!
Runt on dividends:
"You failed to point out that most of this cash is overseas and would be subject to tax if returned to the US"
That still has not kept US firms from paying out more in dividends. From a 3/15/12 Bloomberg article:
"Standard & Poor’s 500 Index companies have never paid more dividends following increases this week by banks including JPMorgan (JPM) Chase & Co., according to Howard Silverblatt, S&P’s senior index analyst. Announced payouts imply an annual dividend rate of $29.02 per index share, Silverblatt said in a note today. The prior record was $28.96 in June 2008 before the figure slid 26 percent to $21.44 in August 2009"
Runt on denies the revival of the Housing Market:
"Yes…inventories are indeed better but all real estate is local"
May 30, 2012CNBC:
Spring Revival for America's Housing Market
CNBC's latest report on the American housing market reiterates the strong home sales numbers in the U.S. and their effect on the overall market. As sales continue to rise throughout the county, we're not seeing a significant increase in inventory. These two factors together are causing price stabilization and even pricing increases in some select real estate markets:
Six years after the housing market began its slide, dragging the U.S. economy into recession, this year's spring season -- traditionally the busiest period for home sales -- is shaping up to be the strongest since the crash. Sales rose more than 10 percent in April from a year earlier and may end the year up by as much as 13 percent, according to the National Association of Realtor. Prices, which plunged by a third from 2006 according to some measures, are rising in some cities. Realtoreport bidding wars, albeit more modest ones than during the bubble years, and buyers are snapping up homes much more quickly than only a few weeks ago
Runt says the economy and stock market are unrelated:
"you’re not under the false impression that the economy and stock market are related"
FYI, the stock market is one of the leading economic indicators.
Runt: "Aren’t you the one who cries insistently about the manipulation in the stock market:
I got company Runt! From Luczo' s Barrons Interview:
"Because the drive stocks are not being priced on fundamentals, they being priced by large investment banks for volume, and volume requires volatility"
"So thaat's why all the big firms are in a different camp than the smaller research firms on their perspective of the drive industry. Is it because these are the smart guys, and those aren't? That doesn't make any sense. It is because the banks are MOTIVATED by volatility and the boutique firms aren't. And therefore the research reflects that. So you can create and environment that always creates doubt, with billion dollar market cap swings in a week. It's insane. Why does it work? Beacuse you have traders who loe to make that work"
Take off your Obama hater glasses and read the fine print, i.e SP500 earnings since 2010:
So in three years, SP500 earnings up 43% and up 100% since 2009
Let's look at how the SP500 did under W:
So in 7 years, 2000-07, SP500 earnings up 47%.
FYI, I left out 2008, cause everyone knows Obama caused the recession before he got in office, at least tha't's what CNBCs leading right wing nut case, Larry Kudlow wants us to believe!
If I included 2008, just a 16% gain for Bubba & Company.
BTW, if you get chance look at the long term, monthly chart of the DJIA. The sideways action from 1966 through 1982 looks a lot like the period 2000-13.
FYI, if the DJIA breaks out and resumes it historic 9% annual growth rate in five years we will be over 20,000. From 1982 through 1987, market ran up 50% from 1024 to over 1500.