Market Insider: It's Here — One Ugly Earnings Season

Market Insider: It's Here — One Ugly Earnings Season

(Source: April 13th, 2009) CNBC, Patti Domm)
After a five-week rally, stocks face one of their toughest challenges yet - a very nasty earnings season.
In the coming week, dozens of companies report, including such major names as Goldman Sachs, Johnson and Johnson, Google, Intel, J.P. Morgan, Citigroup and General Electric. For S&P 500 companies, first-quarter earnings are expected to decline nearly 38 percent.
There is also a full calendar of economic data such as retail sales, industrial production and inflation data.
Given the lack of earnings guidance this quarter, traders are debating whether earnings will be a positive or negative catalyst for stocks, since the opportunity for surprises is greater than in the past. Goldman Sachs says just 25 percent of the S&P 500 now give quarterly guidance.
"The divergence in consensus is the widest it's been," said Peter McCorry, who trades bank stocks at Keefe, Bruyette.

"I don't think we'll see the V-shaped turnaround in the market continue from here ... It will be more drawn out," said McCorry. "The volatility we have is no accident. Expectations are very varied right now. We're very emotional, headline driven, minute to minute."
http://www.cnbc.com/id/30144581

Stocks: Is the Rally on Sound Footing?

Stocks: Is the Rally on Sound Footing?
Almost everyone has been surprised by the stock market's month-long run. But keeping the momentum going could be tricky

(Source: Business Week)
Recession? Financial crisis? Never mind. The stock market just finished an extraordinary month, a big surprise for even the most optimistic observers.
Stocks, measured by the broad Standard & Poor's 500-stock index, hit a low for the current bear market on Mar. 9. A month later, by the close on Apr. 9, the S&P 500 was 26.6% higher.
If this March-April advance were a calendar month, it would be the best month for the S&P 500 since 1933.
"The rally has been surprising in its length and how far it's come," says William Rutherford, president of Rutherford Investment Management. Stock gains are boosting confidence, not just among investors but in the U.S. economy as a whole, he says.
"There is a lot of upward momentum here," says Richard Sparks of Schaeffer's Investment Research. "A lot of buyers are stepping in."
Notes of Cautious Optimism
First-quarter earnings season, which began on Apr. 7, threatened to trip up the market rally. After all, amid a global recession and financial crisis, earnings for the S&P 500 are expected to drop 38%, according to Thomson Reuters (TRI).
But an early earnings announcement from Wells Fargo (WFC) sparked a rally, when the bank reported profits that were double expectations.
"Expectations for earnings season are so low that it's going to be hard to disappoint," says James King, president and chief investment officer at National Penn Investors Trust.
The fact that good news arrived from the financial sector was especially significant.
Read Article...
http://www.businessweek.com/investor/content/apr2009/pi20090410_940389.htm?chan=top+news_top+news+index+-+temp_top+story

Meredith Whitney Shuns Bank Stocks

Meredith Whitney Shuns Bank Stocks
Small, regional banks are in better shape, but don't buy the stocks

Link to video, http://video.forbes.com/fvn/ini/meredith-whitney-shuns-bank-stocks

Investors seek safety in tech

Investors seek safety in tech

P/E ratios (finally) nearing acceptable levels.

P/E ratios going to acceptable levels.
By some measures, P/E ratios are near lows, though it depends how you slice it
(Source MarketWatch)
"There's no doubt that people can look at market valuations and determine that stocks are relatively inexpensive -- but that doesn't mean they're going to quit going down," said Michael Gibbs, director of equity strategy at Morgan Keegan & Co. in Memphis, Tenn.
The price-to-earnings ratio of stocks in the S&P 500 has sunk to 10.6 from nearly 17 at the end of 2007, says FactSet Research. That's based on the Thursday close of the S&P 500 compared to index members' past four quarters of operating earnings, or net income excluding what analysts consider to be extraordinary charges and gains.
Thomson Reuters, which publishes similar analysis, estimates the trailing P/E ratio for the S&P 500 is around 11.
Those numbers are well below the valuations reached during the market low of the 2001 recession, when the ratio stopped at 19. They're also lower than the P/E ratio of 13 touched at the market bottom during the 1990-1991 recession, says Morgan Keegan, which used data compiled by Yale University's Robert Shiller for its historical research.
But widen out the lens, and P/E ratios have dropped even further in some earlier recessions. During the market low of the early 1980s recession, for example, stocks in the index were trading at a mere 8 times earnings. Read Article...

http://finance.yahoo.com/banking-budgeting/article/106697/Stocks-look-cheap-but-they-could-get-cheaper

World stock markets rebound on Chinese stimulus hopes, Shanghai leads recovery

World stocks rebound on China stimulus hopes
Wednesday March 4, 6:43 am ET

World stock markets rebound on Chinese stimulus hopes, Shanghai leads recovery

LONDON (AP) --(From Yahoo Finance) Stock markets in Europe and Asia rebounded Wednesday amid mounting hopes that China will soon announce a big stimulus package that could help limit the length and depth of the recession in the industrialized world.
A legislative meeting starts Thursday in China and top of the agenda is what the government can do to lift growth rates, which have fallen in the wake of the global economic downturn. As one of the few major economies still expanding, China is being closely watched amid hopes its demand and trade can help the world weather the most severe global slowdown in decades.

Chinese shares led Wednesday's advance, with Shanghai's index jumping more than 6 percent to close at 2,198.11.
"Obviously, this unusual rally suggests that investors are overly optimistic about what to expect from the legislature. They think the government will do more to boost spending to stimulate the economy," said Peng Yunliang, an analyst with Shanghai Securities in Shanghai.

Elsewhere in Asia, Japan's Nikkei 225 stock average was up 61.24 points, or 0.9 percent, to 7,290.96, while Hong Kong's Hang Seng added 297.27, or 2.5 percent, to 12,331.15. South Korea's Kospi climbed 3.3 percent to 1,059.26.
Markets in Singapore, Taiwan and New Zealand also gained. Australia's index shed 1.6 percent.
In Europe, the FTSE 100 index of leading British shares recovered from six-year lows to rise 66.42 points, or 1.9 percent, to 3,578.51, while Germany's DAX was up 99.38 points, or 2.7 percent, at 3,790.10. The CAC-40 in France was 54.05 points, or 2.1 percent, higher at 2,608.60.

Stocks slide on Monday Jan, 12th

Stocks slide on Monday Jan, 12th

Stocks went down on Monday the 12th of January on Wallstreet.
Citi shares went down despite talks with Morgan. Oil slipped below $38 dollar per barrel after weakening demand outlook. Falling commodity prices dragged energy stocks lower and reinforced fears that a slowing economy will further erode corporate profits. After bad news and outlooks in the past weeks, Wall Street is expecting fourth-quarter and full-year numbers arriving this week to be particularly bleak. Just before the bell the Down Jones (DJIA) was was off around 1.4 percent, the NASDAQ and the S&P 500 slipped about 2 percent.
The market is in anticipation of the 4th quarter and full year figures. Traders are cautious!

The first half of 2009 will be the time of more global financial trouble, deleveraging, refinancing and the second wave of bailout requests.

The first half of 2009 will be the time of more global financial trouble, deleveraging, refinancing and more bailout requests.

Let's start at the top. Some of the world's saviest people have lost an awful lot of money in the collapsing stock market and the speedy downturn of the world economy. Cars, real estate, banks, hedge funds, the retail sector, newspapers and magazines will not be among the best investments for 2009.

Kerkorian, best known for his ties to the ailing U.S. car industry, this week said he had sold off his remaining shares in Ford Motor Co (F.N), completing a retreat that cost him hundreds of millions of dollars.
Forbes magazine, which tracks the world's richest people, puts Kerkorian's worth at $11.2 billion from investments in casinos and other businesses. His losses made him one of the poorest performers on this year's list, it said.

Iranian-born Tchenguiz draws most attention through newspapers citing his jet-set lifestyle, including an expensive house in an upmarket London district and a sumptuous Louis XIV-style party he is reported to have thrown for his 40th birthday.
His Globe Tenanted Pub Co Ltd, which runs 424 leased pubs across the United Kingdom, said this week it would appoint an external adviser, after narrowly breaching its debt covenants -- early warning signs of financial trouble.
And business publication The Estates Gazette in October said Tchenguiz had dropped off its list of the 500 wealthiest people in UK property after losing 1 billion pounds ($1.45 billion) when Icelandic bank Kaupthing collapsed.

Germany's Merckle, ranked by Forbes among the world's 100 richest people, was caught out by wrong-way bets on shares in Volkswagen AG (VOWG.DE), incurring massive losses.
His investment vehicle VEM Vermoegensverwaltung said on Wednesday it would sign an agreement to obtain a bridge loan from banks as it worked on refinancing the group.

German tycoon Adolf Merckle commits suicide
(Yahoo News, Tuesday January 6)

Market Outlook for the rest of December 2008.

Market Outlook for the rest of December 2008.

An outlook and expectation for the stock markets for the rest of the year.
( Dec 11, Amsterdam 10.30 GMT +1)

With China having had its worst month for exports in 7 years in November it looks like Asian markets are getting more prudent and consolidating. Oil prices head up in Asia ahead of the OPEC meeting in Algeria on the 17th of December.
The OPEC which accounts for 40% of Oil Production in the world is expected to cut output by 2 million barrels per day.
Asian markets are lackluster for the moment and expected to sink again.

Companies are using the current crises to lay off more people. A number of large U.S. employers announced layoffs this week, including Dow Chemical Co., 3M Co., Anheuser-Busch InBev, National Public Radio and the National Football League. The U.S. auto-industry emergency loan plan is taking shape although nobody seems to know what to do next. It is a gigantic problem with dire consequenses.
Brokers and Banks are propping up balance sheets before year end. The recent end of November rally is running out of steam. More deep and dire economic news analysis is appearing almost every day.
We do expect the U.S. markets to go down before year end.
All eyes are on the Obama plan.

In Europe a rift is showing up between the 'Brownites' and the Germans with the almost paralyzed Dutch Government having no plan at all but still waiting for new information. ( A few snippets of news are sippling through about the Dutch Government becoming less wasteful with tax payers money).
The trend and outlook for European markets is negative.

The speed and impact of the current crisis on all levels of society spreading around the world, is really amazing and in some cases stunnishing.