tb
A few charts of interest...10/29/2008...
10/28/2008...Market up 10%..
Great move today...Time to look at charts that consolidated during the sell-off these past few weeks... I think AAPL is showing strength here, and during the sesonal trend, should move higher over next several months...tb
Bllomberg article...
Valuation Watch
The S&P 500 was valued at 10.7 times estimated profit when trading opened today, the cheapest compared with the multiple using trailing profit since at least 1995. The index was also 25 percent below its average closing price over the last 50 days, a level reached only four previous times, spurring average gains of about 20 percent over the next six months.
The Dow’s only larger point gain was on Oct. 13, when the 30-stock gauge jumped 936 points on the government’s plan to buy stakes in banks.
More than nine stocks rose for each that fell on the New York Stock Exchange, where trading volume of 1.7 billion shares was 18 percent greater than the three-month daily average.
Equities around the world tumbled this month, wiping out more than $12 trillion of market value before today, after money markets froze, banks’ credit losses climbed to almost $678 billion and economic growth weakened. The S&P 500, which dropped 3.2 percent yesterday, trimmed its monthly decline to 20 percent today.
Citigroup 14 percent to $13.41 and Bank of America rose 12 percent to $23.02. The S&P 500 Financials Index jumped 13 percent, the gauge’s best advance since September.
Fed Bets
The Fed will announce its decision on interest rates tomorrow. Futures trading suggests a 38 percent chance the central bank will cut the benchmark rate by three-quarters of a percentage point, to 0.75 percent. By contrast, only one of 64 economists foresees that outcome, according to a Bloomberg survey. The rest of the Fed funds futures bets point to a half- point cut.
Alcoa added $1.74 to $10.78. The stock dropped 71 percent this year, leaving it valued at 4.86 times earnings as of yesterday, the cheapest on record.
“Anyone who has a long-term view and looks at earnings multiples and inflation will say it’s a cheap moment to buy stocks,” said Linda Duessel, equity market strategist at Pittsburgh-based Federated Investors Inc., which manages more than $333 billion.
Commercial Paper
GE rose $1.76, or 9.9 percent, to $19.49. The Fed started buying commercial paper yesterday, when companies sold 1,511 longer-term issues totaling a record $67.1 billion of debt due in more than 80 days, compared with a daily average of 340 issues valued at $6.7 billion last week, according to Fed data. The central bank probably absorbed about $60 billion of the total, said Adolfo Laurenti, a senior economist at Mesirow Financial Inc.
Exxon Mobil Corp. advanced $8.77, or 13 percent, to $74.86. Chevron Corp. climbed 13 percent to $70.02. Energy shares in the S&P 500 jumped 12 percent as a group.
Morgan Stanley boosted holdings of Exxon and AT&T Inc. in its U.S. model portfolio, citing the “defensive” qualities of the shares.
Exxon had its position doubled to 4 percent because the world’s biggest energy company is likely to be “a far better than average performer” if some stability returns to the markets, according to analyst Douglas Cohen. AT&T’s position was increased to 3 percent from 2 percent. Shares of the largest U.S. phone company rose 13 percent to $27.61...
...Treasury’s ‘TARP’
The Treasury is buying equity stakes in banks as a way to inject capital into the struggling financial system. Nine of the nation’s biggest banks may receive $125 billion from the $700 billion Troubled Asset Relief Program as soon as this week, and a growing number of regional lenders have announced preliminary approval to take part in the program.
The Treasury also will use the TARP to acquire illiquid mortgage-related assets from a range of financial institutions to make more room on their balance sheet. This effort is moving more slowly as the Treasury selects asset managers to run the debt- buying effort.
Japan’s Nikkei 225 Stock Average today rallied from a 26- year low to gain 6.4 percent, while Hong Kong’s Hang Seng Index recouped yesterday’s 13 percent plunge. The MSCI Asia Pacific Index added 3.4 percent, while Europe’s Dow Jones Stoxx 600 Index climbed 2.3 percent.
