U.S. stocks pulled back today after the S&P 500 reached a five-year high earlier in the week, which was supported by a host of improving macroeconomic indicators. Housing activity continues to show signs of improvement, mergers and acquisition activity is up 27% thus far in 2013, jobless claims are getting better each month and mutual fund flows show that investors are moving more money into stocks than bonds. Continue reading
Monthly Archives: February 2013
Markets Finished the Week Mixed…
Equities were mixed this week as investors digested macro news from overseas and continued solid earnings reports. Of the 341 companies in the S&P 500 that have reported earnings thus far, 75 percent have topped earnings estimates compared with the 62 percent average since 1994 and the 65 percent average over the past four quarters. In addition, 67 percent have exceeded revenue expectations. We are starting to see a steady stream of organic revenue growth which should bolster investor confidence going forward.
The U.S. trade deficit narrowed by over 20% to $38.5 billion in the fourth quarter, suggesting the economy most likely expanded even as military spending dropped the most since the Vietnam era. This was largely due to oil exports reaching record level highs while the amount of oil imports decreased. A weaker U.S. dollar also made American exports more attractive to overseas purchasers. These results are very encouraging and suggest the global economy is improving. U.S. corporations that have a global product reach should benefit from the improving global growth. Continue reading
The trend in the stock market continues higher as investors seem to have regained some confidence in January. The U.S. market reached new cyclical highs this week and remains only 5% away from an all-time record. The Dow Jones Industrial Average closed above 14,000 today for the first time since 2007. The Dow has gained 5.8% in January and the S&P 500 jumped 5.1% for the month. Both indexes are now within striking distance of setting all-time highs. However, corporate earnings are considerably higher (in total) compared to the 2007 peak. Stock valuations have risen but remain attractive from a historical perspective. Continue reading