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Co-founder & CEO of AllenWargent property market & hedge fund advisory.
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Pete Wargent blogspot
Co-founder & CEO of AllenWargent property advisory, offices in Brisbane (Riverside) & Sydney (Martin Place) - clients include hedge funds, resi funds, & private investors.
4 x finance/investment author - 'Get a Financial Grip: a simple plan for financial freedom’ (2012) rated Top 10 finance books by Money Magazine & Dymocks.
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Wednesday, 29 May 2013
Dow to record highs; consumer confidence, home prices jump
You know, I wish had a buck for every time someone had called the end of this bull market the last few years - I'd never need to invest again!
Overnight the Dow added 106 points or 0.69% to close at a new record 15,409 and the S&P 500 also rallied 0.6% to close at 1,660.
Here's Bloomie: "U.S. stocks rose, with the Dow Jones Industrial Average returning to a record, after data showed consumer confidence climbed to the highest level since 2008 and home values jumped the most in seven years.
“The bottom line is there’s been a lot of chatter about how the market’s going to respond when the Fed tapers, but home prices are rising, jobless claims are coming down, and the stock market keeps going up,” James Paulsen, the Minneapolis-based chief investment strategist at Wells Capital Management, which oversees $325 billion, said by telephone. “People are feeling better. They’re noticing this recovery broadening out and firing on more cylinders on a regular basis. They know they’re under-allocated to risk assets.”
The S&P 500 rebounded from its first weekly decline since April 19. The gauge fell 1.1 percent last week as Federal Reserve Chairman Ben S. Bernanke said the central bank could reduce monetary stimulus if economic conditions continue to improve. Investors weighed the prospect of slower Fed bond-buying with data showing that existing home sales climbed and jobless claims topped estimates. U.S. markets were closed yesterday for a holiday."
Happy days indeed for investors in stocks.
Clearly investors believe that the "Bernanke put" is still going to push the market higher, as from a fundamental perspective stocks are now trading at some fairly elevated PE ratios given the fragile state of the economic recovery. 4 year returns from the index are now staggering:
Source: Yahoo finance
I wonder how long before the iron ore price sneaks back into the news?
The correction has taken some time to play out, but the trend is clear enough: the spot price has eased all the way back to US$117/tonne after the exuberant levels we saw in January and February...