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本帖最后由 wnd4 于 2010-4-10 11:58 编辑
by Don Vialoux
This is generally strongest month for U.S. markets
A series of annual recurring events are expected to influence North American equity markets this spring. Most events are positive. Some are not.
The focus event next week is the start of first-quarter earnings reports. Yes, it is the earnings season again... the time of year that investors once again gather around for gifts they've anticipated during the past three months, only to sell them off and exchange them for something better. Ah, Christmas... I mean earnings season.
This year, Wall Street and Bay Street are optimistic that there will be good news and for good reason.
Demand for goods and services is increasing, prices of industrial commodities are rising, employment on both sides of the border is improving and manufactured goods inventories are relatively low.
As usual, Alcoa Inc. starts the earning report parade on Monday for the Dow Jones Industrial Average companies. JPMorgan Chase & Co., another Dow Jones Industrial Average company, will follow on Wednesday.
Year-over-year gains for first-quarter results by major U.S. companies are expected to be extraordinary compared to last year's depressed firstquarter results. According to Thomson Reuters, firstquarter earnings for S&P 500 companies on average are expected to increase 36%. However, a closer look at the source of earnings gains paints a slightly different picture. Most of the gains are coming from financial services, a sector that was under significant stress a year ago.
A look at the median average gain instead of the mean average gain is more appropriate. According to Zacks Investment Research, median gain for the 30 Dow Jones Industrial companies is 10.2%. Largest gains are expected to come from materials, energy, technology and industrial sectors as well as financial services.
The earnings outlook for Canada's top 60 companies is more impressive.
Consensus estimates from Zacks Investment Research show a median gain on a year-over-year basis of 18.2%. Gains are most notable by gold, base metal and energy companies thanks to higher commodity prices.
First-quarter earnings reports will be accompanied by additional good news such as encouraging comments about company prospects for the second quarter as well as the rest of the year. This year, many chief executives will offer positive guidance and will announce share buybacks and dividend increases.
History is about to repeat. Thackray's 2010 Investor's Guide notes that the month of April has a reputation as the strongest month in the year for U.S. equity markets.
Strength is notable during the first 18 days of April. U.S. equity markets move higher in anticipation of first-quarter earnings reports. The stage is set for additional strength in U.S. equity markets next week.
A word of caution: U.S. equity markets also have a history of reaching an important annual peak near the third week in April in a U.S. midterm election year.
Just as the warm weather came earlier than usual this year, so should seasonal profit taking come earlier than usual. "Buy when it snows (in October) and sell when it goes (in April)" makes sense this year.
Will U.S. equity markets take a rest after the favourable period of seasonal strength this year in anticipation of higher interest rates and slowing earnings growth? If traders sell on earnings news, the time to take seasonal profits will have arrived. The charts will tell the tale.
The charts currently suggest that equity markets and most sectors are short term and medium term overbought, but continue to climb a "wall of worry."
Over the next few weeks, a shift to defensive plays is expected that will give investors an opportunity to protect profits through the summer months. Consumer staples will become the investment of choice. Investing during the next two quarters will focus on stock picking. The party is coming to an end and all that is left is the medal ceremony.
Read more: http://www.financialpost.com/tod ... 85590#ixzz0kiEjclds |
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狗仔卡
发表于 2010-4-10 10:56 AM
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