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Results 51–94
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Dem Turnaround Yet to Happen
by Team of Bespoke Investment Group,
The Intrade odds for the Republican Party to win the House of Representatives have been well above 50 percent for some time now (currently at 75 percent), but the Democratic Party has been favored to retain the Senate throughout the Intrade contract's entire history. Today, however, that contract fell below 50 percent for the first time, and the odds are currently at 47.5 percent for the Democratic Party to keep a Senate majority.
The U.S. Oil Glut
by Team of Bespoke Investment Group,
Although U.S. oil inventories declined by 475,000 barrels in the latest week, the decline was less than the forecasted decline of 700,000 barrels. As shown in charts provided, oil inventories in the U.S. are currently right near their highest levels of the year relative to the historical average. Since oil stockpiles peaked earlier in the year, inventories have declined by 2 percent. In an average year, however, oil stockpiles are down 6 percent from their seasonal high by this time.
Using the Past to Predict the Future
by Team of Bespoke Investment Group,
Most technical analysts believe that chart patterns tend to repeat themselves. Using quantitative analysis, Bespoke went back and compared the last six months in the S&P 500 to every other six month period since 1928. They found that the stretch that most closely resembles the last six months is the period from November 1959 through May 1960. While the majority of investors still believe we will avoid the double-dip recession this time around, the 1959 to 1960 example suggests that even if we do go back into a recession (as we did then), a new bear market is not necessarily a sure thing.
How Low Are Bond Yields Really?
by Team of Bespoke Investment Group,
A growing number of investors are calling the bond market a bubble. Bespoke presents a chart showing the yield on 10-year Treasury bonds minus the year-over-year change in the CPI. Using this method, the adjusted 1.62 percent yield on the 10-year bond is still below its historical average of 2.66 percent, but nowhere near historical extremes. While one could make the argument that Treasury bonds are unattractive due to increased supply and their low yields relative to other periods in the past, it is hard to argue that their current valuation fits the criteria for a bubble.
Dow Dividend Yield Versus 10-Year Treasury Yield
by Team of Bespoke Investment Group,
There has been a lot of talk this week about how 'the great bond bubble' is about to crash and that equities look attractive compared to them. One data point that commentators have been citing is that the Dow's dividend yield is now greater than the 10-year Treasury bond yield. We've heard some say that this is the first time this has happened in decades, but in actuality, the Dow's yield got much higher than the 10-year bond yield as recently as late 2008 and early 2009. Bespoke presents a chart Dow yields minus 10-year Treasury bond yields from 1920 to the present.
Democrats Now the House Underdogs
by Team of Bespoke Investment Group,
For those that haven't checked the odds for the November elections over on Intrade.com lately, the odds for Republicans to win control of the House have jumped all the way up to 61 percent. At the start of 2009, the odds for Republicans to win were at just 15 percent. From mid-March to mid-June, odds for control of the House hovered around the 50/50 mark. Since mid-June, however, traders have been betting big on Republican control. At this point, we have to assume that the market is 'pricing in' a Republican victory.
Lebron James to New York?
by Team of Bespoke Investment Group,
There's been lots of movement on the Intrade contracts for where LeBron James will end up, on the eve of his announcement. As Bespoke shows in charts provided, the Cleveland contract has dropped significantly while the New York Knicks contract has spiked this evening. News that he'll be making the announcement from Greenwich, Connecticut instead of somewhere in Ohio seems to be what shifted the odds.
Ten Year Treasury Yield Hits a 52-Week Low
by Team of Bespoke Investment Group,
Remember back in April when the yield on the ten-year was approaching 4 percent and everyone seemed to be worried that the era of low rates was over? That didn't last long. Less than three months later, the ten-year yield is not only lower, but it's also on pace to close today at a 52-week low of 3.14 percent Since April's peak in interest rates, there has been no shortage of concerns popping up regarding Europe and the strength of the US economy.
Gold vs Dollar Correlation
by Team of Bespoke Investment Group,
With gold trading at a record high, we wanted to highlight the shifting correlation between it and the US Dollar. Normally, when gold rallies, the dollar declines and vice versa. However, as the chart below illustrates, gold and the dollar have become increasingly unlinked. In the chart, positive readings close to one indicate a strong positive correlation, while readings closer to negative one indicate a strong inverse correlation. The current level of -0.18 indicates a very weak inverse correlation.
Hayward to Depart as CEO? Goldman to Pay $25 Million or More? Place Your Bets
by Team of Bespoke Investment Group,
Traders on Intrade are currently putting the odds of BP's Tony Hayward to depart as CEO by the end of the year at 59 percent. How about Goldman Sachs? The last trade on the contract for CEO Lloyd Blankfein to depart by the end of the year puts the odds at 20 percent. Odds for Goldman to pay a fine of at least $25 million to the SEC by the end of the year are at 80 percent. The November elections are being heavily traded on the site. Odds for the Republicans to take back the House of Representatives in November are at 47 percent.
Emerging Market Vs. G7 Debt Levels
by Team of Bespoke Investment Group,
Bespoke provides tables comparing debt levels in G7 and emerging market countries. The average level of public debt to GDP among G7 countries is 94 percent. Two countries, Japan and Italy, have levels of debt that are in excess of 100 percent of GDP. Compared to the other six countries on the list, the U.S. debt level of 52.9 percent seems downright thrifty. Meanwhile, the average level of debt in emerging market countries is just 37.4 percent. If concerns over debt are the major issue behind the correction, emerging market countries should thus rebound the strongest in any recovery.
High Yield Outperforms
by Team of Bespoke Investment Group,
The average stock in the S&P 500 is now down 4.26 percent since the index peaked on April 23rd. But at least based on dividends, the high-yield stocks have outperformed their low or no-yield brethren by quite a wide margin during the recent pullback. When breaking up the S&P 500 into deciles based on dividend yield, the deciles of stocks with the highest yields are barely down, while stocks with low or no yields are underperforming. Investors typically flock to safer names during market declines, and it seems to be no different this time around.
Weren't Interest Rates Supposed to Be Rising?
by Team of Bespoke Investment Group,
A couple of months ago, the yield on the 10-year U.S. Treasury bond was rising towards 4 percent, and commentators everywhere were declaring an end to the 'bond market bubble,' which would send interest rates sharply higher. So what happened? Thanks to the problems in Greece and the rest of Europe, US treasuries have been a magnet for investors looking to protect their cash. At a current yield of 3.62 percent, the yield on the 10-year U.S. Treasury bond is currently trading at a two-month low, and breaking below support.
A 1 in 4 Chance We Say Bye-Bye to Blankfein?
by Team of Bespoke Investment Group,
For those wondering what the odds are for Lloyd Blankfein to depart as chief executive of Goldman Sachs, Intrade.com has you covered. The last trade on the Intrade contract for Blankfein to depart by December 31, 2010 was 25 (25 percent odds). The current bid/ask is 27/28, so the odds are slightly higher than one in four at this point. The contract started out at a higher price and has drifted lower over the past few days to its current level.
Republicans Now Favored to Take Back the House?
by Team of Bespoke Investment Group,
Intrade.com has contracts on whether the Republicans or Democrats will control the U.S. House of Representatives following the 2010 midterm elections. While the Democrats currently hold a large majority in the House, the odds for them retaining that majority after 2010 have been declining over the past year or so. As of today, the Republicans are now favored to win a majority in the House after the 2010 elections. The current odds based on Intrade's contract prices are 50.1 percent for a Republican majority and 45 percent for a Democratic majority.
Another Month, Another Huge Deficit
by Team of Bespoke Investment Group,
With total revenues of $153 billion and spending of nearly $219 billion, the federal government spent 43 percent more than it took in this month for its record 18th straight monthly deficit. Believe it or not, this month's $65 billion shortfall was the fourth-lowest over the last 12 months. When all is said and done, the total cost of the Troubled Asset Relief Program bailout is likely to reach $89 billion. When the federal government runs $65 billion in the red during its normal course of business, $89 billion to avert the collapse of the entire financial system doesn't seem so bad.
The Rising Cost of Commodities on the Consumer
by Team of Bespoke Investment Group,
The price of oil is up sharply today, and is trading above $86. While commodity traders love the rise in oil prices, consumers aren't nearly as enthusiastic, especially ahead of the summer driving season. To them, higher prices mean more pain at the pump, and in their wallets. Indeed, while low food and energy prices continue to serve as a rebate for consumers, that rebate has been dwindling since March 2009, and could soon turn into a tax, as they were from the beginning of 2008 through the summer of that year.
Corporate Cost Of Health Care: Announced Charges as of 3/31
by Team of Bespoke Investment Group,
Since Congress passed the health care reform bill on March 21st, we have seen numerous companies announce that they will take charges to earnings. The charges stem from one aspect of the legislation that eliminates deductions for tax-free subsidies companies receive from the government for providing prescription drug benefits to retirees. Due to the material and quantifiable impact that the bill will have on their business and financial results, the companies are required by law to disclose it. So far at least fourteen companies have announced charges totaling at least $1.6 billion.
Yield Curve Back Near Highs
by Team of Bespoke Investment Group,
With long-term interest rates rising and short-term interest rates contained, the rising yield curve is once again starting to receive attention. The Fed defines the yield curve as the difference in basis points between the yield on 10-year and 3-month U.S. Treasury bonds. High values in the yield curve are positive for the economy, while an inverted yield curve is a harbinger of weakness. The curve is currently at the high end of its historical range, and has made multiple attempts to break through the 380 bps level in the current period.
What Happened to Nanotech?
by Team of Bespoke Investment Group,
Nanotech was one of the next big things during the 2002-2007 bull market, but has faded in recent years. Stocks and ETFs related to nanotech lost investor interest, and the sector has seen a drop in news coverage. Unlike many crazes during the internet bubble, however, nanotech does serve a purpose. If the bull market continues, it will be interesting to see whether nanotech resurges.
Preferreds are Preferred
by Team of Bespoke Investment Group,
The ETF that tracks U.S. preferred stocks has soared to bull market highs in recent days. Preferred stocks fell more than common stocks during the 2007-2009 bear market, but since March 2, 2009, the iShares S&P U.S. Preferred Stock Index ETF is up 153 percent, while the S&P 500 is up 66 percent.
Intrade Odds for Obamacare to Become Law by 6/30/2010
by Team of Bespoke Investment Group,
The odds for Obamacare to become law by June 30, 2010 jumped to 60 percent on Intrade a few days ago after the president pushed for the Senate to use reconciliation to pass reform, a procedure that requires only 51 votes and cannot be filibustered. Before then, odds ranged from 30 to 35 percent.
Recommended Bond Allocation
by Team of Bespoke Investment Group,
Have analysts become more conservative, or will the recommended bond weighting continue to fall as the market goes up? Wall Street strategists currently recommend a 30.5 percent weighting in bonds. Before the run-up in treasury bonds during the financial crisis, the recommended bond weighting ranged between 15 and 20 percent. As bond prices rallied, strategists increased their recommended weighting. Bond prices peaked in December 2008, however, and have been drifting lower since the onset of the current bull market in stocks.
Taxes Paid by the Highest-Paid Americans
by Team of Bespoke Investment Group,
A recent IRS report provides ammunition for both sides in the debate over whether the ultra-rich should pay higher taxes. The 400 top U.S. earners accounted for 2.1 percent of all taxes paid in 2007, up from 1.2 percent in 1997. They paid an average tax rate, however, of 16.6 percent, down from 24.2 percent ten years earlier. Their average income in 2007 was $137.9 million.
Sirius Breaks (Above) the Buck
by Team of Bespoke Investment Group,
Sirius XM Radio's stock broke the $1 mark for the first time since September 2008. Shares rose by 1,900% since trading for as low as five cents last February, and are up 80 percent since their low on December 22. An improving auto sector may be driving up share prices.
Historical S&P 500 Sector Weightings
by Team of Bespoke Investment Group,
Bespoke Investment Group reviews historical sector weightings in the S&P 500, and says the Technology currently has its highest allocation since the internet bubble burst in 2000, at 19.2 percent. Financials rank second at 14.4 percent after falling to 8.9 percent in March 2009. Consumer Staples still weigh bigger than the Consumer Discretionary sector as they have since 2007, but Consumer Discretionary could overtake Consumer Staples once again if the bull market continues.
Bespoke's Sports Illustrated Swimsuit Issue Indicator
by Team of Bespoke Investment Group,
Bespoke Investment Group says the appearance of American model Brooklyn Decker on the cover of this year's Sports Illustrated swimsuit issue may be a good sign for investors. The S&P 500 remained positive in 13 out of 16 years an American appeared on the cover since 1978 and posted average returns of 10.6 percent. It stayed positive in 12 out of 16 years an American did not appear on the cover, and posted average returns of 8.2 percent.
Sovereign Debt Default Risk
by Team of Bespoke Investment Group,
Since the beginning of the year, sovereign default risk (measured by credit default swap prices) has risen for Portugal, France, Iceland, German and Australia. It's even risen for the US - by a greater percentage than for either Dubai or Greece.
Country Stock Market Performance
by Team of Bespoke Investment Group,
Worries about a few EU countries and the Euro currency have rattled global equity markets. Sovereign debt credit default swaps have been rising sharply for countries such as Greece and Portugal in recent days. Equity markets in Spain, Portugal, and Hungary are down more than 5% today alone. They highlight the year to date performance and performance since the 1/19 peak for the major equity markets of 81 countries around the world.
Results 51–94
of 94 found.
