Posts Tagged ‘stock prices’
Stock Market Correction: Why it’s Limited
By Mitchell Clark, B.Comm. for Profit Confidential
Unless we get a major shock like war or something related to the sovereign debt crisis in Europe, I don’t think the stock market is going to experience a lot of further downside. Stock prices might drift and then trade range-bound for a couple more months, but stock market valuations are fair and this provides a lot of cushion.
I do think there is more downside potential in gold, silver and oil prices and it’s not just related to slower growth in the global economy. A lot of the price weakness in these commodities is related to strength in the U.S. dollar, which experiences renewed enthusiasm every time there’s an uncertain development in the eurozone.
There remains, in my view, an underlying strength to the stock market at this time. Institutional investors want to be buyers in this market; they only need a reason to do so. I fully expect that large-cap companies that pay dividends will continue to be the market leaders going into 2013, because, in a slow growth environment, dividends income is crucial. I think it’s fair to conclude that expectations for capital gains are fairly low among all stock market investors, so dividends become the only way to beat the inflation rate.
Because we’re now in the lull between earnings seasons, increased dividends announcements are reduced. I think we’ll get another round, however, during second-quarter earnings season, largely because companies can and want to keep shareholders happy. The cash hoard among most large-cap companies remains substantial.
When share prices go down, yields for dividends go up of course. Most of the stock market’s leaders haven’t actually … Read More
What’s Really Going on with Big Banks
By Sasha Cekerevac, BA for Profit Confidential
Big bank stocks have had a tough year in 2011. They’ve been beaten and bruised. Some big banks, like Belgian financial giant Dexia, have needed a government bailout. During the past week, all of the big banks have had a strong rally due to the added liquidity provided by the Federal Reserve and world central bankers, but do we really know what’s going on behind the scenes?
Why Michael’s Feeling Vindicated
this Morning
By Michael Lombardi, MBA for Profit Confidential
How do I feel this morning? Vindicated.
I’ve been writing on these pages for months that the stock market has been in a bear market rally that started in March 2009 and that stock prices would move higher before Phase III of the bear market ultimately sets in and brings stocks back down to their March 2009 lows. Over the past few weeks, I’ve been getting e-mails from my readers telling me that I’ve been in “bear market rally” mode for too long and that the markets were done…the bear market rally was over. And, presto, what do we get? A single-day 490-point jump for the Dow Jones Industrial Average yesterday—its biggest one-day gain in years!
Debt Crisis Aside—Let’s Get Down to Business with the Real Numbers
By Mitchell Clark, B.Comm. for Profit Confidential
The European debt crisis has not gone away. The fix comes only at the end of the debt crisis’ beginning. Frankly, I’m kind of annoyed it took this long for policymakers to act. The domestic stock market has suffered long enough because of a lack of firm action on the European sovereign debt crisis. It isn’t going away anytime soon, but thankfully, the debt crisis is now being addressed.
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