WASHINGTON (MarketWatch) -
"The U.S. manufacturing sector...ISM index...climbed to 54.8% last month from
53.4% in March... (A reading over 50 indicates expansion.) ...The
new-orders index rose to 58.2% from 54.5% in March, while the employment index
edged up to 57.3% from 56.1%.”
From:
Most economists had
expected a slight decline. The market
shot up at 10AM. The ISM number was
released at 10AM.
FROM MINYANVILLE...
Sell in May and go
away? FORGETABOUTIT!
PERSONAL CONSUMPTION &
RESIDENTIAL FIXED INVESTMENT
Both personal consumption
expenditures and residential fixed investment are getting better.
VALUATIONS ARE CHEAP
“To simply be at the same valuation multiples
that we were at last year at the end of April, the S&P 500 would need to be
at 1450 on a forward P/E basis, 1500 on an EV/EBITDA basis, or 1600 on a free
cash flow yield basis.”
THE FED IS FORCING US TO OWN STOCKS
“(Last year) The 10-year yield was also around 3.3% vs. today's sub-2%. Stocks are a fair amount cheaper and bonds are much richer than they were a year ago.”
“(Last year) The 10-year yield was also around 3.3% vs. today's sub-2%. Stocks are a fair amount cheaper and bonds are much richer than they were a year ago.”
THE CORRECTION MAY BE OVER
“May” may have already happened in April, with equity fund redemptions at their highest in any April going back at least 17 years. Don't let baseless historical patterns keep you from capturing the next leg of the recovery.
Full story at: http://www.minyanville.com/business-news/markets/articles/cash-flow-yield-free-cash-flow/4/30/2012/id/40680#ixzz1tc4lBn5e
“May” may have already happened in April, with equity fund redemptions at their highest in any April going back at least 17 years. Don't let baseless historical patterns keep you from capturing the next leg of the recovery.
Full story at: http://www.minyanville.com/business-news/markets/articles/cash-flow-yield-free-cash-flow/4/30/2012/id/40680#ixzz1tc4lBn5e
ANOTHER ECONOMIST'S VIEW
After all the bad news
from John Hussman yesterday, let’s see another view on the economy from TR
Price:
"T. Rowe Price's Chief
Economist Alan Levenson thinks the improvements in several areas of the economy
form a solid foundation for a continued—if still moderate—recovery….Levenson
says that GDP could take a severe hit if all the Bush tax cuts and the payroll
tax holiday were to expire and longer-term unemployment benefits were stopped.
It's unlikely, in his view, that lawmakers will let this happen. He anticipates
that only those income earners in the top two tax brackets will see their taxes
revert to 2001 levels and that major cuts in government spending will be
averted or postponed…Levenson says the crisis in Europe "is going to be
with us for a very long time—not just in terms of many years of restraint for
those over-indebted economies—but many years of painful reforms to get their
economies growing again."
THE MARKET
The S&P 500 was UP 0.6%
Tuesday to 1406. VIX fell 3% to 16.61.
NTSM
The NTSM analysis remained
HOLD today, Tuesday.
MY INVESTED POSITION
I bought back into the
stock market at S&P 500, 1155 on 7 Oct after the 6 Oct NTSM buy
signal. I remain 100% long in the
long-term portfolio (and 100% stocks in the 401k.). (See the page “How to Use
the NTSM System” – the link is on the right side of this page). 100% in stocks is quite extreme so don’t do
it unless you have a high tolerance for risk.
