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Global Stocks Gain As Lockdown Eases and US Stock Futures Gain Ahead of Big Earnings Week
Looks like it's going to be a good stock day in the markets today as stock futures are up across the board both here and abroad. Let's also see if high yield bonds move upward with their stock cousins. I'm beleiving they will. This indeed could turn into a strong up day (and week) for some investors especially if the shorts start to cover. As I write the VIX is in the mid 30's. If today is a strong rally day for stocks I look for the VIX to continue its decline. On March 20th I recordered the VIX with a reading of 62 with the S&P 500 Index at a valuation of 2305. Friday, I recorded the VIX with a reading of 37 with the S&P 500 Index at a valuation of 2837. As the VIX moves lower stocks trend to move higher. Should we have a strong up week in the stock market (say a 5% gain) then this will put the S&P 500 Index just below the 3,000 mark at 2980 range. For this to happen earnings, for the S&P 500 Index, will need to get marked to the $150.00 range. And, this could indeed happen. As President Trump says ... "We'll see!"
Good morning. As I write, stocks are set to add to Monday's gains as the futures are up across the board both here in the States and abroad. As stocks have moved upward the VIX has been in decline and now resides in the low to mid 30's. In addition, Treasury yields now seem to be slowly rising. I'm thinking to support this upward move, in the stock market, earnings are going to have to be reflected in the $150 (or better) range for the S&P 500 Index to trade and hold the 3,000+ range mark. The Index has now regained more lost ground and it is well above of where I thought we would currently now be ... and ... on through most of the summer.
Good morning Old_Skeet. Earns going forward ! Stock pickers going forward should have it over Index funds. Yes or no ? Derf P.S. Futures off to another upper !
Hi @Derf, Thaks for stopping by and reading along with your question concerning stock picking (active management) vs. Index funds in which you seek a yes (or no) answer. For me ... the answer depends ... and, I'll explain. Some actively managed funds will beat the S&P 500 Index while some will trail it. In looking back over my portfolio I have five activley managed equity funds that over a five and ten year period that have bettered the Index (SPY). Over a one and three year period I have six actively managed all equity funds that have bettered the Index (SPY). I also have some good dividend paying equity funds that pay a higher dividend than the Index and overall trail it a bit. With this, and in some cases the answer to your question is a yes and under another the answer is a no.
My thinking is that a lot will depend on how new money money gets invested. Under an Index format new money gets spread through the Index lifting all positions held. In a cap weighted Index it gets spread based upon a cap weighted basis with larger positions catching more of the money over smaller ones. In an equally weighted Index new money is spread evenly. And, in actively managed funds it gets invested upon the manager's call.
With this, there is not, from my perspective, a yes (or a no) answer to be found ... as it depends.
...As for the lockdown easing: I heard last night on the CBC that Quebec will re-open schools in 2 weeks, but 3 weeks for Montreal. That's if things don't get worse in the meantime. They have about one-tenth of our population, north of the border. Still a bit wintery up there. Two nights ago, there was a bit of snow as far south as western Massachusetts.
Hi @Crash, I'm thinking that S&P 500 pushing 3000 streaches things a bit. With this, I'm looking for it to trade sideways and range bound for a while. Again, earnings are going to have to come in around the $150.00+ range to support a 3000+ valuation. I don't think we are there yet. Perhaps, by late summer or early fall things will be somewhat sorted out by then with Q3 and Q4 earings looking better.
Hello ... and, Good Mroning! Here in the States, as I write, stock futures are up across the board along with oil. Could be a good day for stocks. Treasury yields are up which means bond prices have declined as yields and prices generally move in an opposite direction of one another.
Inspite of the decline in the S&P 500 Index yesterday my portfolio did well due to a good number of foreign markets having an up day as I have about a 30% weighting to foreign. My three best performing funds yesterday were PMDAX +1.98% (a domestic small/mid cap dividend value fund) ... DWGAX +1.23% (a developing world dividend paying equity fund) ... and, HWIAX (1.11%) a deep value dividend paying hybrid fund). Seems some investors might be in the hunt for dividends, and value, now that equity valuations appear to be streached.
Treasury issues have trended positive pricing overnight, with the normal swings; not unlike overnight equities. Currently, the yields remain lower. It this trend sticks, as well as UP equity; we'll have a decent day all around at the finish.
Hello and Good Morning. It looks as though today stocks will open down in the States this morning and they are currently down abroad as well. According to Old_Skeet's stock market barometer stock valuations are now streached and we are due for a little rest. Have a good day. Old_Skeet
Comments
Derf
P.S. Futures off to another upper !
My thinking is that a lot will depend on how new money money gets invested. Under an Index format new money gets spread through the Index lifting all positions held. In a cap weighted Index it gets spread based upon a cap weighted basis with larger positions catching more of the money over smaller ones. In an equally weighted Index new money is spread evenly. And, in actively managed funds it gets invested upon the manager's call.
With this, there is not, from my perspective, a yes (or a no) answer to be found ... as it depends.
Skeet
Inspite of the decline in the S&P 500 Index yesterday my portfolio did well due to a good number of foreign markets having an up day as I have about a 30% weighting to foreign. My three best performing funds yesterday were PMDAX +1.98% (a domestic small/mid cap dividend value fund) ... DWGAX +1.23% (a developing world dividend paying equity fund) ... and, HWIAX (1.11%) a deep value dividend paying hybrid fund). Seems some investors might be in the hunt for dividends, and value, now that equity valuations appear to be streached.
Treasury issues have trended positive pricing overnight, with the normal swings; not unlike overnight equities. Currently, the yields remain lower. It this trend sticks, as well as UP equity; we'll have a decent day all around at the finish.
Some Treasury issues.