Earnings Would Be Big Problem Without Apple?
Saturday, March 31, 10:30 a.m.
Apple stock has risen to the point where it is now the largest capitalization stock in the world, even the severe 2007-2009 bear market not much more than a blip on the long-term chart.
It’s so profitable that if its earnings were left out, S&P 500 earnings for the 4th quarter would have been 3.0% instead of 6.1%. That would double the P/E ratio of the S&P 500, which is touted as still being undervalued, or perhaps it would be more revealing to say that theoretically the P/E ratio of the S&P 499 would be double that of the S&P 500.
Its estimated that the 21% earnings increase for the tech sector over the last 12 months was actually only 5% when Apple’s earnings are taken out. The difference is shown in this chart produced by Barclay’s Capital, the blue line being tech sector earnings without Apple.
Its estimated that S&P 500 earnings for the 1st quarter of this year will show no growth from the 4th quarter, but if not for Apple’s earnings would actually show a decline of 1.6% from the 4th quarter.
Yet investors are not just bidding up Apple but the entire market?
A few Interesting global charts.
I’m still fascinated by the divergences between the U.S. market and so many of the other major economies of the world.
The highly touted BRIC nations (Brazil, Russia, India, China). Down sharply in March while U.S. market experienced a strong month.
And other regions:
In fact, the world’s markets on average omitting the U.S.
And then there is the U.S.
It’s great for our 100% invested Seasonal Timing Strategy. And in our non-seasonal Market Timing Strategy we do not have a sell signal, but can the divergence continue?
Is Great U.S. Treasury Bond Bull Market Over?
We’ve been warning you for several months that bonds were at least vulnerable to a tradable correction.
The 20-year bond has lost 10% of its value since mid-December.
To read my weekend newspaper column ‘Don’t Shrug Off Similarities To Last Two Aprils!’ Click here.
Subscribers to Street Smart Report: In addition to the charts and updates in today’s premium content area of this blog, the new issue of the newsletter will be out on Wednesday in the subscribers’ area of the Street Smart Report website.
Yesterday in the U.S. Market.
A mixed day to end a positive week. The biggest winner by far was our holding in the inverse ETF against bonds, TBF, which closed up a big 1.7% on the plunge in bonds.
The Dow closed up 66 points, or 0.5%. The S&P 500 also closed up 0.4%. The NYSE Composite closed up 0.5%. The Nasdaq closed down 0.1%. The Nasdaq 100 closed down 0.3%. The Russell 2000 closed down 0.2%. The DJ Transportation Avg. closed down 0.1%. The DJ Utilities Avg closed up 0.6%.
Gold closed up $6 an ounce at $1,668.
Oil closed up $.29 a barrel at $103.08 a barrel.
The U.S. dollar etf UUP closed down 0.1%.
The U.S. Treasury bond etf TLT plunged 1.7%.
Yesterday in European Markets.
European markets also closed up yesterday. The London FTSE closed up 0.5%. The German DAX closed up 1.0%. And France’s CAC closed up 1.3%.
Global markets for the week.
A positive week in U.S., but mostly negative globally.
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To obtain access please click on the ‘Subscribe’ link. It will take you to an information page on subscribing to Street Smart Report, a subscription to which includes access to the premium content area of this Street Smart Post blog.
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Next week’s Economic Reports:
Next week will be a very important week for potential market-moving economic reports, including the ISM Mfg Index, Factory Orders, the ADP Jobs Report for March, and on Friday when the U.S. Market will be closed for the Good Friday holiday, the Labor Department’s Employment Report for March. To see the full list click here, and look at the left side of the page it takes you to.
To read my weekend newspaper column ‘Don’t Shrug Off Similarities To Last Two Aprils!’ Click here.
Subscribers to Street Smart Report: In addition to the charts and updates in today’s premium content area of this blog, the new issue of the newsletter will be out on Wednesday in the subscribers’ area of the Street Smart Report website.
I’ll be back with the next regular blog post on Tuesday morning at 9:25 a.m.
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