The year 2014 has been a good one for stocks. Domestic economic strength has boosted the markets, particularly in the second half of the year. However, the year was not without its headwinds. A relatively slower first half witnessed a decline in GDP, caused primarily due to harsh winter weather. Meanwhile, concerns from foreign markets…
As the S&P 500 (SPX) pushes towards Goldman Sachs 2,100 year end target (for 2015!!) today, we thought it worth considering just how much awesomeness has been pulled forward, priced-in, exuberantly-chased. As the following charts show, based on bottom-up long-term-growth expectations, S&P forward P/E valuations have never been higher. But that’s not all… The current Forward…
Looking through some of the gainers from last week, two stocks caught my attention. These two stocks have not performed well in the recent months. GRPN Groupon (GRPN) has not performed well at all this year. But, the stock popped after earnings in October. It took time to consolidate and now it looks like…
Welcome to edition 236 and the last edition of Insider Weekends for 2014. We have been publishing these posts continuously for over 4.5 years and it has been a great learning experience. While insiders as a group have outperformed the market more often than not, they are also often early and sometimes completely wrong. One…
by Dirk Ehnts, Econoblog101 I have lately asked whether the private sector – firms and households – can borrow from the central bank, and the answer was no. I should have made it clear, perhaps, that the “no” is not a “never” but a “no, but”. Since there is not one central bank but many, rules differ….
There may be no correlation between economic growth (GDP) and the stock market in the US; and in China too, as Joshua M Brown shows below. This is because GDP only partially reflects corporate earnings and because earnings are only one factor affecting the performance of the stock market. So what of the frenetic trading around the weekly and…
To everybody’s surprise, this year started off with most emerging markets regaining their ground lost in 2013 due to ‘taper tantrums’. In fact, some of these markets proved huge contributors to global recovery (Read: 3 International ETFs Beating SPY This Year) Developing nations were assisted by a number of factors in this time period that helped…
The car is at the center of the biggest boom in subprime lending since the mortgage crisis, and The NY Times reports, similar to how a red-hot mortgage market once coaxed millions of borrowers into recklessly tapping the equity in their homes, the new boom is also leading people to take out risky lines of credit known…
Reader Steven Kopits writes “potential GDP model is also a binding constraint model”, so GDP “…is subject to some sort of natural speed limit which cannot be exceeded”. This assertion is so amazingly absolutist in nature, and represents such a misunderstanding of how macroeconomists typically think of potential, that I am moved to observe that if this…
Deals and Financings Otsuka Pharma (OTSKF) of Japan snagged marketing rights to Iclusig®, a leukemia drug developed by Ariad Pharma (NSDQ: ARIA), for Japan, China and eight other Asian countries (see story). Otsuka will pay $77.5 million upfront plus additional regulatory milestones. Ariad will receive a “substantial” share of net product revenues. Iclusig, a tyrosine kinase inhibitor,…
