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Weekly Chartology
Recapping the week that just ended, in a few easy bullets (with the requisite spin) and charts, from Goldman Sachs.
Performance
S&P 500 fell -1.9% this week. The Financials sector was the worst performing sector, falling - 3.5%. Consumer Discretionary was the best performing sector, falling just 80 bps. We expect S&P 500 to rise to 1300 by mid-year (+22.3%), before ending 2010 at 1250 (+17.6%).
S&P 500 earnings
Our top-down EPS forecast of $76 and $90 for 2010 and 2011 reflect +33% and +20% growth, respectively. Our pre-provision and write-down EPS forecasts are $81 for 2010 and $91 for 2011. Bottom-up consensus forecasts a 39% increase in 2010 to $79, and a 20% increase in 2011 to $95.
Valuation
Top-down, the S&P 500 trades at an NTM P/E of 14.0X (13.1X on pre-provision EPS). Bottom-up, it trades at NTM P/E of 13.6X and LTM P/B of 2.2X.
Sector views and performance
Our recommended sector weightings have generated -26 bp of alpha YTD. We have lost the most ground in our overweight Info Tech position (-12 bp). We have generated the most positive alpha in our underweight positions in Telecom Services and Utilities (+5 bp).
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I think Master Bates is Roubini posting anon.
or Leo-sultan of the Solar System!
"We expect S&P 500 to rise to 1300 by mid-year."
Blankfein, quoting Capt. Picard, to his prop desk: "Make it so."
February 5, 2010
In the wake of a controversial Supreme Court decision giving corporations and unions more freedom to spend on elections, many federal and state lawmakers are hoping to curb Citizens United V. FEC's effect on elections. Find out how some legislators are fighting to curb Big Money spending even as the Court invalidates laws in 24 states aimed at keeping elections clean.
http://www.pbs.org/moyers/journal/02052010/watch.html
Do you not realize that case was about a small non-profit organization (a type of corporation) being banned from releasing a POLITICAL DOCUMENTARY, which portrayed Hillary Clinton in a unfavorable light? This case was not about campaign contributions dipshit, but about freedom of speech and expression. Stop being a fucking tool.
Is it possible to produce any documentary or fiction that does not test the limits of our ability to suspend disbelief, that would make the Ice Empress be seen in a favorable light?
What a joke. The highest earnings ever recorded came in at $87 in 2006 and have obviously been proven to have been the result of anything but fundamentals. Yet now, according to the squid, we are going pretty much right back to those levels in 2010. Right.
Note to Goldman: You cannot control earnings. You can control stock prices though. Stick to the latter, that way you know you will be right.
Thank you for sharing, I found it very interesting, especially their page 17. Are these guys the smartest men in the room who know something we don't, or are they talking their book?
"We expect S&P 500 to rise to 1300 by mid-year (+22.3%), before ending 2010 at 1250 (+17.6%)."
Remember $200 oil?
"We expect S&P 500 to rise to 1300 by mid-year."
Lord Blankfein, quoting Capt. Picard while addressing his Prop Desk: "Make it so."
Does anyone have handy GS's early 2009 forecasts for year end to review their accuracy? I seem to remember $200 oil for '08, and I think it was a 1200 S&P for December 31 2009.
I think we end up year end 2010 about where we are right now. No net change, with lots of volatility and frantic movement.
Unemployment rate at 10.7% in 2011= an 18% real unwmployment rate= riots in major cities.
GS: ..."despite a solid payroll report that saw the unemployment rate dip to 9.7%" Top of page 2.
Nawww -- you don't think -- could they be pumping up the market on their clients' nickel (and the nickels of the free-peekers on Scribd) while they themselves get ready to short down to S&P 650?
Awwww, yew guys are jest tewww good!
Isn't buying stocks with a high sharpe ratio (as they recommend) just buying stocks that have provided good risk-adjusted returns in the past? Is that really a strategy worth the paper its written on?
if only GSCO 'knew' that institutions tend to sell tech the 3rd week of Jan as a rule. i guess they're not familiar with that trend of the last thirty years.
gotta love the 'rummyism' on page deuce.
what are those operating earnings looking like ??
how about y/o/y % change of ?
how about dividend yield with some actual f'ing historical analysis ?
nope, ok. this is cute though, for sell-side anal-ysis.
Thanks for the highlight, TD; always enjoy the read.
GS said oil at $85 by end 2009 too and almost single-handedly delivered driving a recession-level demand market from $35 to $80; probably what will happen is they will try for 1200 this time, fall short and market settles well below 900 for end 2010.
S&P 500 EPS Growth:
2009E: 14.8%
2010E: 39.0%
2011E: 20.3%
Interesting consensus forecasts above given that the long-term nominal growth rate for S&P earnings is approximately 7.0% annually.
http://www2.standardandpoors.com/spf/xls/index/SP500EPSEST.XLS
Some TA people like myself have been warning that the bear rally was ending.
The trend is now down.
March 2009 lows won't hold either.
http://www.zerohedge.com/forum/market-outlook-0