s&p 500

Margin Debt Returns

Margin debt again escalated in June, putting some emphasis back into the smaller caps and their high beta compatriots. After surpassing the dot-com bubble’s previous levels for both nominal margin usage and negative investor net worth in February, some caution was re-admitted if only briefly. There wasn’t much discernable impact on the broader market indices, .. read more

Bubbles and Skepticism Split By Earnings and Sales

Nearly all (97.5%) of the S&P 500 companies have reported for the first quarter. EPS for the index companies stumbled rather spectacularly, though weather is being blamed for nearly all of it. Back on January 23, index EPS in Q1 was expected at around $29.40 (as reported). As of the latest update, EPS is only .. read more

Margin Debt Matches Small Caps

We still may not know the difference between cause and effect, but margin debt balances dropped in March for the first time in ten months. The $14 billion decline in margin debt was also coincident to an increase of $6 billion in relative cash balances in equity accounts at FINRA dealers. That meant total investor .. read more

But The PE Ex-Neg Earnings

If you go to the “fact sheet” for the Russell 2000 index trying to find the standard PE valuation metric, the only one provided by the index keepers is something called “P/E Ex-Neg Earnings.” The current valuation offered is 22.61, which sounds much more reasonable than the latest (April 25) raw PE estimate from the .. read more

McDonald’s Again

McDonald’s latest results confirm that something is very much amiss on the consumer side. Total global revenue grew only 1% Y/Y, including new store launches and acquisitions. However, as has been the pattern since 2012, US comparable store sales lagged markedly. The rate of contraction in Q1 was actually the worst in more than a .. read more

FOMO

In February 2013, more than a year ago, Jeremy Stein, Federal Reserve Board Member, openly expressed concern over behavior in certain sectors of the financial markets. He categorized this as “reaching for yield”, but there was more than a whiff of caution in his exposition of leveraged loans and junk debt. “The annualized rates of .. read more

Corporate Revenues Back To Low Point

Going back to the snow debunking from earlier today, the primary impediment to wider economic expansion outside of bifurcation and artificial monetary channels is income and employment. Mainstream commentary aside, employment has been mostly atrocious for some time. The clear divergence between the Establishment Survey and the Household Survey, both from the BLS, establishes that .. read more

The Market Isn’t The Market

With so much talk about bubbles resurfacing lately, it’s worth an attempt to try to draw out exactly what a stock bubble looks like. There is little dispute about the bubble nature of the dot-com era, but the market has drastically changed in its appearance and structure beyond just Greenspan’s exuberant creation. In this instance .. read more