Judging by the S&P 500 index, American shares now trade at 18 times forecast 2009 earnings. That’s easily a third more expensive than their historical average. Wall Street analysts predict a 35% surge in corporate profits next year ... If they’re right, today’s stock prices are fair or close to it ... If they’re wrong, look out below ... Cautious investors ought to keep some cash handy and focus their buying on cheap companies ... There aren’t many deep discounts to be found ... I
LIKE EVERY MONEY MANAGER, ROBERT LEVITT is waiting to see whether the U.S. stock-market rally gains ground or fizzles. But Levitt's clients, the affluent individuals who hire him to manage their separately managed accounts or invest in his hedge funds, have less at stake on the future course of the Standard & Poor's 500 than most of their peers ... "Global economic leadership has moved outside the United States, so that is where we are positioning our clients to earn the best returns -- we want
As a local at the Chicago Board of Trade, a wise trader once told me that the market aims to hurt as many speculators as possible. That's especially true, it would seem, when it's being manipulated by political, rather than economic, forces. Witness the market for government debt, which, despite efforts to keep rates lower, has suffered losses in 2009 as yields have climbed ... On Wednesday, Federal Reserve Chairman Ben Bernanke told lawmakers that "The Fed believes that a highly accommodative
It may seem like a risky bet, but emerging markets — notably China — have the potential to significantly outperform developed nations in the current environment, these brokerage experts say ... Who's Talking: Ting Lu, economist, Bank of America-Merrill Lynch ... The Gist: While U.S. investors are scratching at the dirt looking for those elusive green shoots of economic revival, China's recovery is "real, robust and sustainable," Lu says ... Strong second-quarter GDP growth and other
It’s hard to ignore signs of improvement in the economy, however tentative. Consumer confidence has rebounded, stocks have moved off their lows, and even the battered financial industry is regaining some of its old swagger. But not everything will return to normal. The economic crisis has already led to significant shifts in both consumer and corporate behavior that will create headaches for many firms—but opportunities for a handful of others ... Whether you’re a CEO or a consumer,
AMERICAN BEACON ADVISORS' bond mavens, Kirk Brown and Patrick Sporl, have done an admirable job of flying their respective fixed-income funds, AB Treasury Inflation Protected and AB Intermediate Bond, through the credit-market turbulence of the past two years. By mandate, they've stuck to plain-vanilla stuff — in Brown's case, mostly inflation-indexed Treasury securities, and in Sporl's, Treasuries and corporate bonds. They also have hewed closely to their benchmarks, taking only
Market Wrap-Up ... A barrage of second-quarter earnings and new assurances from the Fed on inflation left exchange-traded funds with modest gains Tuesday. Equities were essentially flat for most of the session as traders wrestled with results from several Dow components, airlines and technology companies, as well as the outlook for interest rates from the Federal Reserve ... Enthusiasm faded after a strong start despite better-than-expected results from blue chips, including Coca-Cola (KO),
Open your wallet and pull out a dollar bill and note that it isn't the president's signature on our country's currency, but that of the Secretary of the Treasury ... Known as the country's chief financial officer, the Treasury secretary is the principle economic advisor to the president ... From taxes to borrowing to currency, he is integral at shaping the nation's economic policy and path ... There wasn't much love for former Treasury Secretary Henry "Hank" Paulson while testifying before
The second quarter earnings season is proving to be a critical point in the cycle of recession and recovery. Optimistic -- or rather, better than bad -- outlooks from the likes of IBM (IBM) and bellwether chipmaker Intel (INTC) are providing further evidence to our pundits that the worst of the recession is over, but that may be about all they agree on ... Even ultra-bear Nouriel Roubini, who is credited with predicting the current collapse, said the economy is turning a corner although he took