NEW YORK (Reuters) - major blue chips, including some companies focus on the consumer, will have to show that they can counter sluggish economies developed by taking advantage of the growth in the emerging markets and technology - if Wall Street is to maintain the pace of gains this week.
Companies like Microsoft (MSFT).(O), PepsiCo (PEP).(N) and Coca-Cola (KO).(N), unloved on Wall Street, could be to reveal good buys if they can show that they justify higher assessments that investors are now ready to give them.
"If you see these Cokes and Pepsis and these sorts of names of multinational consumer post good results, I think it's going to give the impression that the stock market can overcome many of these national issues," said Nick Kalivasan analyst at MF Global in Chicago.
Before the recession, consumers and the financial sectors have benefited the massive credit expansion. Not so much more.
Growth is now concentrated in the industrial, materials, and energy stocks benefiting from strong demand in emerging markets, and a sector of technology supported by robust demand companies.
Earnings average growth across these sectors amounts to about 33 percent in the first quarter last year, according to Thomson Reuters data. It is more than double the growth estimated for the S & P 500 and towers on the growth of 5 per cent in financial sector before a weak housing market.
Investors will also want to see the less stable performance in developed markets as they gear up to this week for a Conference of press by Ben Bernanke, Chairman of US Federal Reserve. Tough questions will be asked on what monetary policy will look like after that policies of easy fed money terminated at the end of June.
EMBRACING THE UNPOPULAR
Growth is scarce and it is at the wheel of the evaluations in the sectors where it is concentrated.
Last week, investors chased a relatively expensive technology names host such as Apple (AAPL).(O) and VMware (VMW)(N) some appear to be extreme: Cloud computing company Saleforce.com (CRM.)(N) is priced at almost 300 times current profits.
The rear price-earnings ratio in the sector of the S & P materials is more than 20 times current earnings from 16.3 to the whole of the market, according to data from Thomson Reuters StarMine.
For investors as Whitney Tilson, a manager of hedge fund T2 partners in New York, which is to create opportunities in unpopular with blue chips, where he focuses his attention on the spot.
"There are many blue chip of large-cap companies are traded at moderate prices", he said.
"At a time when everyone is get enamored with cherished strong growth and commodity, it is precisely the time when looking to play defence and boring societies that we believe have a lot of growth."
One of these least favoured societies established report next week is Microsoft. The company suffers from a reputation of slow growth and its gains almost 11 times current price clearly reflects.
Comparison Microsoft with Apple, Tilson says that the former is a company inherently better because it focuses on the software with additional production costs marginal to the company of equipment for the consumer of Apple.
Apple is "a fabulous business, but I am just simply pointing out that you can have a better company, although the one is not growing faster - but always croissants nicely - for half the price in terms of price-earnings multiple," Tilson said.
Earnings blowout of Apple and exceptionally strong results of other big tech and industrial companies have led the three major U.S. stock indexes higher for a week. The blue chip Dow Jones industrial average (.)(DJI) ended the shortened week of vacation Thursday at 12,505.99, its end higher for the year and its best closing since June 5, 2008 level. For the week, Dow Jones index and the index reference Standard & Poor 500 Index (.)(SPX) each gained 1.3%, while the Nasdaq Composite Index (.)(IXIC) climbed 2 percent.
US financial markets were closed for Friday.
GAINS FRENZY, FED TALK
This week, 180, S & P 500 companies are set to report earnings. Companies that have reported to date, 75 percent beat expectations of analysts. It's just above the average in the last four quarters, but well above the average of 62 per cent since 1994, Thomson Reuters data showed.
"As people are lower GDP figures (approximately) apparently weekly, firms are now a fairly strong income growth and margins remain intact, said Jerome Heppelmann, Portfolio Manager and investment officer head of old mutual fund targeted to Berwyn., Pennsylvania.
"I see more as a continuation of large-scale economic recovery", he said. "In some cases, the names of technology will be more exposed and more mobilized for it."
While gains drive come to fully in force, investors will also focus on the first of the Federal Reserve press conferences. The Wednesday Press Conference is scheduled to begin after the Federal Open Market Committee pricing will end his two-day meeting. Bernanke, the Fed Chairman, intends to give four sessions per year of press.
There will probably be questions asked on the type of monetary policy that the Fed will continue in its $ 600 billion bond-buying program, called quantitative easing or of2 to Wall Street, tire to its end, at the end of June.
A school of thought says that of2 led the rally in stocks and products by the subscription budget deficit and forcing the money which would have been in Treasury bills on equity markets and commodities instead.
"What happens when of2 ends and the Government begins to withdraw from this liquidity?" Tilson was asked. "How much is just artificial, based on the deficit, money-printing stimulation." And how it is really authentic? I don't know the answer, but I am concerned. ?
(Reported by Edward Krudy.) (Editing by Jan Paschal)
没有评论:
发表评论