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Will October Be Tricky Or Treaty For Stocks?
David Kostin's recent track record leaves something to be desired: his most recent pair of thematic trade recommendations (Buy High Dividend stocks, Sell S&P; and Buy High Sharpe Ratio/Sell S&P) has not only underperformed the market, but has generated a negative absolute return. Which is not to say he has been wrong: in fact his latest recommended pairings were the most sensible he has suggested in a while. Yet the market does not care for rational choices, and either rewards high beta names in droves, or punishes them, while everything else languishes, in a zero alpha environment, coupled with low or no beta for the non risk-on sector. Yet that was September, and September is now over. What will happen in October? As Kostin suggests in the preface of his exhaustive monthly chartbook, "The fate of market rally depends on October data; 3Q earnings season: trick or treat?" With mid-term elections three days after Helloween, there may just be far too much money for the former to be even an option.
The economic data surprised to the upside in September, supporting a 9% rally in equities. However, the S&P 500 has returned 4% YTD, well behind gold (+19%) and Treasuries (+14%). Oil is up 1% YTD. Consumer Discretionary is the leading sector up 13% while Information Technology is flat YTD. Upcoming 3Q earnings season should shed light on how companies are coping with the continued US slowdown.
Kostin has prepared a screen for stocks in pretty much every industry, using more input criteria than one can shake a stick at.
So for all those (mostly institutional) types, who are hopefully trading with merely other (stupid) people's money, here is the full rundown of Kostin's picks and pans (at this point it is too painful to even attempt the traditional GS re-re-reverse psychology experiment).
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My Hope is "bloody" for GS.
Good luck with that. Q3 was a disaster for the IB's, following Q2's slide. I am always amused why people focus on the average comp per employee derived from the amount set aside for bonus number, announced every quarter by GS. Wanna bet that the skew towards the top end is a) greater than normal and b) the 'we lose the bottom 5%' metric will soon begin to increase, following Q3 results ?
Did I miss something or was this: "Will October Be Tricky Or Treaty For Stocks?" from Bartel's piece this a.m. from Merrill...?
Yep, sure was...
A full 93 pages .....yet the only thing worth reading is gold ( +19 ) and T ( +14 ) on page one. Maybe he's getting paid by the page. Nice gig.
Goldman Sucks, on with "Spruce Goose II"
After the rally in September, October will be flat at best. Most likely the market will decline this month. There simply isn't enough good economic news to justify a continuing rally.
Fundamentals mean shit nowadays - markets go green on bad news don't ya know. Game of last bear standing:)
Hmmm...looking at this, things aren't looking so great.
http://dshort.com/articles/Consumer-Metrics-Growth-Index.html
Ouch that's going to leave a mark.
Harry, those are some great visual displays of information. thank you. wow.
Harry your a changed man - off the meds I see.
Well this is what happens when you take this graph and adjust to real time
makes interesting reading. Bens Ice cream is melting it would appear.
My vote: Snowballs chance in Hell (if it were an option)
http://theautomaticearth.blogspot.com/search?updated-max=2010-10-01T15:00:00-04:00
Yeah, it's better if you check out www.theautomaticearthblogspot.com
Pretty darn compelling arguement for SPX 650 ish...who's counting at that point.
Rick on risk off bitchez!
Red October
My vote : Tricky.
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