Displaying items by tag: bull market

Wednesday, 25 August 2021 19:37

UBS Sends a Stark Warning to Equity Investors

(New York)

UBS just put out a very interesting warning to a large segment of the equity market. As part of their overall market outlook update, UBS explained their view on earnings and the direction of the S&P 500. There are two very notable points they made. Firstly, and most importantly, they reminded investors to stop fretting over valuations. In their words “While valuations are higher than average, we remind investors that valuations have no correlation with market returns over time horizons less than three years … And valuations typically don't contract meaningfully unless investors are concerned about a sharp growth slowdown or a policy error by central banks. And secondly, they think the S&P 500 will rise 11.5% by the end of 2022.


FINSUM: This is a brilliant reminder—equity valuations mean very little and are more a reflection of macro outlook than a concern in their own right.

Published in Eq: Total Market
Thursday, 29 July 2021 18:33

Why a Big Bull Market for Bonds Looms

(New York)

You may not be paying much attention to it, but the last month has been very good for investment grade bonds. The reason why is that ratings agencies are in the midst of a massive wave of upgrades to companies that got downgraded at the start of COVID. This has sent demand for debt soaring as companies re-enter the investment grade market. For example, just in the week ending July 16th alone, the iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) pulled in $1.1bn in inflows. According to a credit strategist at Citi, “It’s like something that I have not seen in my time [in the industry] … After the financial crisis we didn’t get major companies moving back to investment grade so quickly”.


FINSUM: This is the early innings of yet another corporate bond bull run. Only credit specialists have mostly paid attention to this point, but investment grade bonds seem a good choice given the credit rating tailwind.

Published in Bonds: IG
Wednesday, 28 July 2021 07:09

Are Millennials Buying the Dip?

(New York)

The stock markets have had some very small slumps but rebounded quickly in the last 12-months. The refusal to…see the full story on Magnifi’s site

Published in Eq: Large Cap
Thursday, 22 July 2021 17:46

Don’t Worry About an ESG Stock Bubble

(San Francisco)

Many investors are worried that the huge growth in ESG assets might be causing a bubble in the most common stocks in ESG funds. However, the reality is that they are not. According to Bridgewater Associates: “The shift to ESG appears to be still in its early innings. Investor positioning in sustainable equities is not yet overextended … The US ESG index looks very similar to the aggregate market, and much less frothy than stocks that have been most popular with retail investors where we think valuations are most stretched”.


FINSUM: In other words, despite all the hype about ESG asset growth, overall valuations are in line with the broader market so there is no specific risk to ESG funds.

Published in Eq: Tech

(New York)

Lots of information is trading that has investors skittish for the upcoming horizon…see the full story on our partner Magnifi’s site

Published in Eq: Large Cap
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