Summarizing The First Half And The Last Scorching Week In Pictures And Charts
Goldman's David Kostin, who last week was warning about the combustible effects of a hedge and mutual fund space underperforming the general market, has again found his bearings after a week which saw the biggest move in the market in two years, primarily courtesy of an unprecedented and very much delayed shift out of bonds and into any other asset, marking the end of QE2 and substantial uncertainty as to who will buy government issuance in the future. However, the future is a topic for another day. Here is a brief recap of the past: "S&P 500 ended 2Q almost unchanged from the start of April, but has returned 6% YTD. Looking back, Health Care was the major surprise, surging 14% YTD followed by Energy at 11%. Financials was the only sector to post a negative return, falling 3%. Largecaps lagged with S&P 100 returning 5% and Russell 2000 advancing 6%. Looking ahead, macro uncertainty abounds in Europe (sovereign debt), Japan (earthquake recovery), China (inflation pressures), and US (debt ceiling and budget negotiations). However, at the micro level we expect S&P 500 EPS will establish a new high of $96 and lift the index to 1450, a return of 10% in 2H."
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