Technology Outperformance No Longer Supported By Fundamentals

Source: Morgan Stanley

A word of caution from Morgan Stanley’s equity strategists:

« The latest burst of Tech outperformance has not been accompanied by superior EPS trends. Just now Tech shows few signs of stopping (or even slowing); for example: i) post its largest 1m outperformance versus the S&P since 2012, the NASDAQ is now 2.7SD above its 12M relative average; ii) 80% of constituents of MSCI ACWI’s IT index outperformed the market over the last month, the highest breadth reading since 2003. Amid all this euphoria we’d encourage investors to keep a close eye on EPS trends as the latest burst of price outperformance has not been accompanied by EPS outperformance. »

It seems investors have started noticing.

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Putting Recent Market Sell-off in Perspective

Source: Pixabay

Markets have been unnerved by rising interest rates in the US, with ripple effects around the world. The most staggering event has happened on the VIX market with a number of funds/ETNs making the headlines after having lost tons of money. What should investors take from these events ? A couple of reflections and interesting comments seen here and there. Continuer la lecture de « Putting Recent Market Sell-off in Perspective »

Things That Could Help European Stocks Break Out… Or Not – JPMorgan

JPMorgan’s equity strategist team has published a report today trying to figure out if European stocks will finally break out the glassdoor of 400 points (for Stoxx Europe 600) that they have been hitting 3 times already (2000, 2007, 2015).

They argue that this time might be the time, IF a number of conditions are successfully met. Among them, earnings recovery, operating leverage, decent (!) valuations and direction of bond yields are important factors to consider. Big swing factor are FX.

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Future For Malaysia Equities Is Bright, Says Nomura

Nomura expects Malaysia equities to return 4% in 2018 and says stock picking will be of the utmost importance to outperform.

The positive view from the broker stems from a number of factors, listed in a report dated Jan 22: « 1) solid macro and consumption growth, 2) continuing foreign inflows amidst positive revisions, 3) better corporate balance sheets with dividend upside, 4) possible election rally, 5) likely net buying by local institutions, 6) Malaysia’s laggard performance vs peers, 7) key concerns on banks getting addressed, 8) an appreciation MYR. »

The brokers set a 2018 year end target of 1,900 points for KLCI index.

Continuer la lecture de « Future For Malaysia Equities Is Bright, Says Nomura »

JPMorgan Expects Double Digit Earnings Growth in 2018 Globally

« Global earnings look set to deliver double digit growth this year, at 12%, the best since 2010. The strength was broad based, with all the key regions contributing, and largely driven by Cyclicals and commodities. As base effects are turning less favorable, the question is whether earnings will remain a support for equities into 2018. »

This is the opening statement and a rather bullish intro to a report published today by JPMorgan’s strategists Mislav Matejka, Emmanuel Cau, Prabhav Bhadani and Aditi Balachandar. Continuer la lecture de « JPMorgan Expects Double Digit Earnings Growth in 2018 Globally »

Une explication (fondamentale) du récent rallye boursier


Source: Goldman Sachs, "Where to Invest Now", 7 Novembre 2011

La macro domine le sentiment général des investisseurs, certes. Mais ce graphique permet avec le recul d’imaginer que vers la fin de l’année, de nombreux investisseurs se sont rendus compte qu’il y avait un gap croissant entre l’évolution des indices et la trajectoire des résultats des entreprises (au sein du S&P 500). Cela montre qu’avec un dollar volontairement déprécié et un soutien massif de la Fed, la Bourse américaine n’avait sans doute pas besoin de grand chose pour rebondir…

Big picture: une vue sur les bénéfices mondiaux

Avec l’anticipation d’un ralentissement de l’économie mondiale, et la crise de la dette en zone euro, les investisseurs ont engagé un mouvement de révision en baisse des prévisions de croissance bénéficiaire dans le monde. Les graphiques suivants sont issus d’une étude publiée par les analystes quantitatifs de Bank of America Merrill Lynch.

Malgré cela, les actions affichent des niveaux de valorisation extrêmement bas, que ce soit en termes de P/E prospectif…

… ou au regard du ratio P/B.