Share to Twitter Share to Linkedin Key takeaways Overall inflation for December dropped to 6.5% from 7.1% in November on an annual basis. While this information isn’t exactly worthy of a celebration, it’s a sign that things are moving in the right direction since it shows that the rate hikes are slowing down the economy. Investors look at the CPI data because if inflation drops, there are hopes that the Fed will slow down with the aggressive rate hikes that have made the cost of borrowing more expensive. With the inflation figures dropping and the economy adding jobs last month, we now have to wait to see how the Fed reacts in February at the next FOMC meeting, where many analysts are expecting a rate hike of 0.25%. The most recent Consumer Price Index (CPI) data came out last Thursday and immediately impacted the stock market. The CPI report for December showed that headline inflation had dropped by 0.1% and that the rate of inflation on an … [Read more...] about The Most Recent CPI Data Is In: Here’s The Current State Of The Economy And What It Means For The Stock Market
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Share to Twitter Share to Linkedin The recent decline in the stock market has led some of the commentariat to paint a dire picture. According to Richard Waters in the Financial Times , the situation is not only “a car crash”: the crash “may be far from over.” Indeed, “the axe is hanging over high-growth companies with stretched valuations…” As Mark Barnes, and Christine Haggerty and FTSERussell tell us, there is a “tech wreck” that has taken a “brutal toll.” According to John Gapper at the Financial Times , “As inflation raises supermarket prices, higher interest rates will curb investment in innovation.” Apparently, we can now say “goodbye to the golden age of consumer choice.” As Mark Twain once noted , “Reports of my death have been greatly exaggerated.” Once we look beyond the recent news, and look at the bigger picture, we can see that tech is far from dead. In fact, as of May 13, the five-year year total return of the tech-heavy Nasdaq index … [Read more...] about How To Understand Stock Market Alarmism
The Philippine stock market is starting the year strong, with the Philippine Stock Exchange index (PSEi) up by almost 6 percent in the first two weeks of January. Catalysts for the market’s strong performance include the weakening of the US dollar, leading to the strengthening of the peso, the reopening of China which is expected to push down global inflation, and foreign fund flow into emerging markets (EMs). Although I am happy that the stock market is performing well, there are several risk factors that could prevent it from sustaining its strong performance for the whole year. PH economy facing challenges Although the Philippines is less vulnerable to external factors since it is a domestically driven economy, growth is still expected to slow down this year as high inflation hurts consumer spending and higher interest rates hurt investment spending. The government will also not be providing much in terms of fiscal stimulus as its budget this year is higher by only 4.9 … [Read more...] about Risks to the stock market’s strong performance this year
L&T Finance Holdings also stated that it recorded its highest-ever quarterly retail disbursements at Rs 11,607 crore, up 53 percent YoY L&T Finance Holdings hit a fresh 52-week high in the morning on January 16 after the company reported a 39 percent year-on-year (YoY) jump in consolidated profit at Rs 454 crore for the quarter ended December 31, 2022 . Net interest income increased 23.5 percent year-on-year to Rs 1,931.8 crore in the said quarter. At 12 pm, the stock was quoting at Rs 95.85 apiece, up 3.8 percent, after hitting a 52-week high of Rs 98.30 in early trade. Trading volumes at 32 million shares were over four times the 20-day average of 7.8 million. Follow our live blog for all the market action The company's net interest margin (NIM) plus fees came at 8.80 percent, up 70 basis points (bps) YoY due to changing portfolio mix towards retail, the firm said on January 13. The company also stated that it recorded its highest-ever quarterly retail … [Read more...] about L&T Finance hits 52-week high on strong Q3 numbers; more upside in store?
Share to Twitter Share to Linkedin Below, we see the performance of the US indices in the first 2 weeks of 2023. Note that the Value Line index is number one. This is an equally-weighted index of 1700 stocks, so it is very representative of most stocks on the exchange. The Russell 2000 Index is a small-cap stock market index that is comprised of the smallest 2,000 stocks in the Russell 3000 Index. Numbers four and five are the S&P small and mid-cap averages. Note that the large-cap indices like the S&P 100 and the Dow are near the bottom of the list. I expect these trends to persist into the spring. The S&P 600 has risen 89% of the time from January 22 nd to June 8 th over the last 28 years. These stocks are scanned by relative strength and by cycles. Tennant TNC Company designs, manufactures, and markets floor cleaning equipment. The stock is ranked third in the S&P 600 for cycles and relative strength. Relative strength bottomed … [Read more...] about Stocks This Week: Buy Tennant Company And Brown & Brown
Share to Twitter Share to Linkedin The Vietnam stock market has essentially been closed to new IPOs for a year. Their bond markets and banking sector have been roiled by controversy and reforms. Their domestic stock index has traded down by 30% since 2021. That said, Vietnam is home to several ambitious companies preparing to take on overseas competitors to dominate the local markets and hoping to make their mark on the global capital markets. The country’s domestic consumption is soaring as the country recovers from COVID lockdowns, with GDP growing at a blistering 8% in 2022. More importantly, a new generation of tech-forward domestic companies seeks to transform the domestic economy by driving new digital business models and, in some cases, even disrupting global markets. The most audacious example is the Vietnamese electric vehicle company, VinFast, which filed for a $1 billion IPO on NASDAQ in December. VinFast, which is part of Vietnam’s largest … [Read more...] about As Southeast Asia Emerges As A Capital Markets Contender, Vietnam Primes Growing Digital Companies For Global IPO Market
Share to Twitter Share to Linkedin The stock market is a complex machine whose movements are difficult to understand. However, one thing seems clear — if a company grows faster and projects a brighter future than investors expect, its stock price will rise. If that same company’s performance and prospects fall short of the Wall Street view, its stock price will plunge. For investors, this simple rule is not particularly useful because it is virtually impossible to predict ahead of time whether a company will exceed or fall short of investor expectations. What’s more, there are times when a company’s performance and prospects are a matter of being in the right or wrong place at a time when factors outside of management’s control abruptly shift the rules of the game. You don’t have to look into the distant past to find examples. In 2020 and 2021, the pandemic created a boom in people working from home (WFH). That was spectacular news for companies like … [Read more...] about Up 34% Since January 19, Stock In Boston’s Wayfair Will Fall Further
Share to Twitter Share to Linkedin The mission of JP Morgan Chase &Co (JPM) is to “be the most respected financial services firm in the world.” In many ways, that is already “mission accomplished.” JPM is the world's largest bank by market capitalization . It is the fifth-largest bank in the world in terms of total assets—almost $4 trillion. In the 2008 financial crisis, it was JPM that the U.S. government turned to for help. Just a few words from its silver-haired chairman and CEO Jamie Dimon can lift the entire stock market—albeit briefly. Yet in the last few months, JPM has experienced several marks of disrespect. · The latest episode of disrespect came last Monday (May 23) when a full day’s investor conference failed to allay investors’ skepticism at JPM’s plans to invest heavily in technology. · Back in January, JPM’s shares had begun tanking when Dimon announced that it was foregoing its long-standing approach of careful … [Read more...] about What JPMorgan Must Do To Get The Stock Market’s Respect
Share to Twitter Share to Linkedin T he recessionary fears spiked again last week and helped drop the Dow Jones Industrials over 600 points last Wednesday. In a weekend article , it was reported from JPMorgan’s trading model that “ seven of nine asset classes from high-grade bonds to European stocks now show less than a 50% chance of a recession.” ADVERTISEMENT However, S&P 500 suggested less bullishness as they have a 75% probability of a recession. That was consistent with last week’s skepticism over the stock market rally so far in 2023. Individual investors do not seem to be as bearish as last Thursday’s survey from the American Association of Individual Investors (AAII) showed that the bullish % rose to 31% up from 24% the prior week. The bearish % also declined well over 6%. Many investors look to analysts’ buy or sell ratings to help them determine what stocks to buy or sell. These ratings are regularly reported in the financial … [Read more...] about Analysts Say Buy These Market Titans But Should You?
Share to Twitter Share to Linkedin We believe that pharmaceutical giants Merck stock (NYSE: MRK) and Pfizer stock (NYSE: PFE) will likely offer similar returns over the next three years. Although Merck is trading at a comparatively higher valuation of 4.9x trailing revenues vs.2.9x for Pfizer PFE , this valuation gap can be attributed to Merck’s lower financial risk, as discussed below. If we look at stock returns, Merck’s 37% growth in the last twelve months is much better than the 16% fall for Pfizer and -16% returns for the broader S&P 500 index. There is more to the comparison, and in the sections below, we discuss the possible stock returns for MRK and PFE in the next three years. We compare a slew of factors, such as historical revenue growth, returns, and valuation, in an interactive dashboard analysis of Merck vs. Pfizer : Which Stock Is A Better Bet? Parts of the analysis are summarized below. 1. Pfizer Revenue Growth Is … [Read more...] about Pick Either Merck Stock Or Its Peer – Both May Offer Similar Returns