Goldman Sachs is the latest bank to publish research trying to justify the current high level of the market as well as its year-end S&P 500 price target. Goldman laid out its case for further equity gains in a presentation published at the beginning this month titled Where To Invest Now. Across 80 pages, the investment bank’s chief equity strategist David Kostin dissects the US equity market and find several areas that look attractive based on macro and micro trends. However, some of the most interesting analysis contained within the presentation is the top-down assessment of the S&P 500’s current valuation and outlook. Goldman: T...
On April 4, Krispy Kreme owner JAB Holdings signed a $7.5bn deal to acquire bakery chain Panera Bread – representing the biggest restaurant deal in US history. The news caused shares in Panera to jump 14 percent, reaching record highs of $312.98. The companies hope to close the deal in the third quarter of 2017, but are currently awaiting approval from shareholders and regulators. Panera’s founder and CEO Ron Shaich said: “Panera has been the best performing restaurant stock of the past 20 years – up over 8,000 percent. Today’s transaction is a direct reflection of those efforts, and delivers substantial additional value for our sh...
On April 4, the US Federal Trade Commission (FTC) approved a $43bn merger between Swiss chemical company Syngenta AG and China National Chemical Corp (ChemCorp). While Syngenta hailed the decision as a “major step” in the process, FTC approval carried the condition that each company must divest three types of pesticide: the herbicide paraquat, the insecticide abamectin and the fungicide chlorothalonil. The FTC said in a statement: “Syngenta owns the branded version of each of the three products at issue, giving it significant market shares in the United States. ChemChina subsidiary ADAMA focuses on generic pesticides and is either the f...
For the past few years, many Wall Street strategists called the rotational shift from domestic equity returns (and flows) to international equity returns (and flows) incorrectly…or at least too early. Despite valid rationale supporting more growth potential in international stock markets than in domestic stock markets, given both the length of the secular bull market and economic recovery in the United States, the bull market run in the U.S. has continued. However, thus far in 2017 the tides appear to be starting to shift away from domestic shores and towards international countries. As the chart below depicts, while U.S. stocks have outpe...
The birds are chirping, the leaves are green but the greenback is on the back foot. What technical levels should we look out for as the dollar is falling? Lines of support and resistance for the major pairs: EUR/USD, GBP/USD, USD/JPY, USD/CAD, AUD/USD, NZD/USD and USD/CHF. Video length: 00:04:28 Lines of resistance and support for the following crosses: EUR/CHF, EUR/GBP, EUR/JPY, GBP/JPY and we also top it off with WTI Oil. Video length: 00:03:38...
Short term Elliott Wave view in USD/JPY suggests that rally to 115.48 on 3/10 ended Intermediate wave (X). Decline from there is unfolding as a zigzag Elliott wave structure in which the first leg Minor wave A is subdivided in 5 impulsive waves. Down from 3/10 high, Minute wave ((i)) ended at 114.46, Minute wave ((ii)) ended at 115.195, Minute wave ((iii)) ended at 110.71 and Minute wave ((iv)) is proposed complete at 111.59. Cycle from 3/10 high is mature and Minor wave A has enough extension to be called complete, but a marginal low towards 100 – 110.5 area can’t be ruled out to complete Minor wave A. Afterwards, pair should bounc...
It’s tough to like anything about the government these days. Bureaucrats squander our money and get on their soapboxes about their fake morals… It’s enough to make anyone scream. But there is one good thing about the government… It generally pays its bills. And that’s good news for Government Properties Income Trust (Nasdaq: GOV), a real estate investment trust that rents office space to federal, state and local governments. It’s a popular stock thanks to its 8%-plus yield. I last looked at it in August of 2015, and at that time, it received a B for dividend safety. The company’s first dividend was $0.50 per share in Novem...
During the so-called Chinese Banking Liquidity Crisis of 2013, the relative cost of funds for non-bank institutions spiked to 100bps. So, the fact that the ‘shadow banking’ liquidity premium has exploded to almost 250 points – by far a record – in the last few days should indicate just how stressed Chinese money markets are. While interbank borrowing rates have climbed across the board, the surge has been unusually steep for non-bank institutions, including securities companies and investment firms. They’re now paying what amounts to a record premium for short-term funds relative to large Chinese banks, accordin...
After opening the day on a positive note, share markets in India have continued the momentum and are trading marginally above the dotted line. Sectoral indices are trading on a positive note with stocks in the oil and gas sectorand stocks in the metals sector leading the gains. The BSE Sensex is trading up by 86 points (up 0.3%), and the NSE Nifty is trading up by 32 points (up 0.4%). Meanwhile, the BSE Mid Cap index is trading up by 0.8%, while the BSE Small Cap index is trading up by 0.9%. The rupee is trading at 65.44 to the US$. In news from stocks in the PSU sector. The government is set to meet its divestment target for th...
In a recent update, I pointed towards the 2,335 SPX region as the next likely target in the market. This week, the market has finally obliged, and taken us to our next waypoint. As I have been noting for several weeks, the market has been much more bearish than I had expected with only a slight drop off the all-time highs. Moreover, my ideal expectations had us dropping even lower towards the 2,335 SPX region before setting up another rally attempt. But, the fact that the market has become so bearish of late, even though we have not dropped much off the highs, tells me that the market may only be setting up the bears for a whipsaw they may no...