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Mon, 20th February 2017

Anirudh Sethi Report

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Archives of “index fund” Tag

Global stock barometer a whisker away from record peak

Global large-and-mid capitalisation stocks have climbed to within easy striking distance of setting a new all-time high for the first time in almost two years, led by a strong performance by US equities.

The MSCI all-world index, which tracks companies in 46 countries that account for 85 per cent of the investable equities market, closed on Monday at 441.14, just 0.35 per cent away from the all-time high it struck in May 2015.

The gauge has climbed by 23.5 per cent over the past 12 months, partly reflecting a sharp rebound from a fall at the start of last year.

Equity bourses around the world have been lifted by a brightening outlook for the world economy, along with a recovery in the price of oil.

World Bank economists reckon global growth will accelerate from 2.3 per cent in 2016, to 2.7 per cent this year, and 2.9 per cent the next year. The optimism has come as central banks in Europe and Asia have loosened monetary policy in a bid to spur faster growth.

In the US, the Federal Reserve has pledged to only “gradually” tighten policy. Some economists have also marked-up their estimates for the rate of expansion for the world’s biggest developed economy on expectations that Donald Trump and a Republican Congress will roll-out business-friendly policies.

Overnight US Market :Dow closed +143 points.S&P 500 up 12 points.

Stocks around the world continued to push higher Monday, and U.S. indexes again hit records. Bond yields climbed.

The Standard & Poor’s 500 index rose 12.15 points, or 0.5%, to close at a record 2,328.25 and topped $20 trillion in market value for the first time ever. The Dow Jones industrial average rose 142.79 points, or 0.7%, to an all-time closing high of 20,412.16. The Nasdaq composite gained 29.83 points, or 0.5%, to a record 5,763.96.

Treasury yields also rose as the yield on the 10-year Treasury note rose to 2.43% from 2.41% late Friday. Two-year and 30-year Treasury yields also notched higher.

Roughly five stocks rose for every three that fell on the New York Stock Exchange. Financial stocks helped lead the way, and those in the S&P 500 rose 1.3%. That’s the largest gain among the 11 sectors that make up the index. Raw-material producers and industrial companies were also strong.

Stocks resumed their upward climb last week after stalling for a couple weeks. Strong earnings reports have helped drive the gains. The majority of companies in the S&P 500 that have reported fourth-quarter earnings so far, 69%, have beaten Wall Street’s expectations, according to S&P Global Market Intelligence. It’s mostly come through companies keeping control of costs better than analysts were forecasting.

Overnight US Market :Dow closed -19 points.

Energy companies led U.S. stock indexes lower Monday as the price of crude oil declined. Phone company and materials stocks were also among the big decliners. Investors were weighing the latest batch of company earnings news.

The Dow Jones industrial average fell 19.04 points, or 0.1%, to 20,052. The Standard & Poor’s 500 index fell 4.86 points, or 0.2%, to 2293, as the broad-based index snapped a three-day winning streak. The Nasdaq composite index fell 3.21, or 0.1%, to 5664, as the tech-heavy index pulled back from Friday’s record closing high.

Benchmark U.S. crude fell 82 cents, or 1.5%, to close at $53.01 a barrel in New York. Brent crude, used to price international oils, lost $1.09, or 1.9%, to $55.72 a barrel in London.

Several energy companies were trading lower. Devon Energy slid 3.2%, while Chesapeake Energy dropped 3%. Marathon Oil shed 4.1%.

The 10-year Treasury yield fell to 2.42% from 2.47% late Friday.

Investors are still cautious as Trump’s early acts as president have been shaping markets for the past couple of weeks. On Friday, Trump directed the Treasury Secretary to look for potential changes to the Dodd-Frank law, which reshaped financial regulations after the 2008-09 financial crisis. Investors applauded that move but remain uncertain about the future impact of other policies. Over the weekend, the U.S. immigration ban on refugees and travelers from seven Muslim-majority countries was blocked by a federal judge and an appeals court turned down a Justice Department request to set that judgment aside. The White House said it expects the courts to restore executive order, which was founded on a claim of national security.

Overnight US Market :Dow closed +32 points

Stock indexes wavered between small gains and losses before ending mixed Thursday as investors sized up the latest company earnings news. Consumer goods and industrial stocks climbed the most, while health care and utilities were among the biggest laggards.

The Dow Jones industrial average climbed further above the 20,000 level it passed Wednesday. gaining 32 points, or 0.2% to 20,100.91.

Wall Street came off solid gains from the day before. The Dow Jones industrial average, after topping the magic 20K milestone and staying there, hit a record closing high along with the Nasdaq composite and the S&P 500.

On Thursday the Nasdaq slipped fractionally, losing just 0.02% to 5655.18. Off a little less than 0.1% was the S&P 500, now at 2296.68.

It’s been a record-making week on Wall Street. The S&P 500 index and Nasdaq composite closed at all-time highs on Tuesday and Wednesday. The Dow, which tracks 30 major industrial companies, added its own milestone Wednesday after it breached the 20,000 mark for the first time.

The market is getting a general boost from strong company earnings and investor optimism that the Trump administration’s policies on taxes, regulation and trade will be good for business.

Oil  prices jumped as benchmark U.S. crude oil was up $1.07, or 2%, at $53.82 per barrel in New York. Brent crude, used to price international oils, was up $1.08, or 1.9%, at $56.50 a barrel in London.

19% of large cap fund managers beat benchmark in 2016

Only one in five US mutual fund managers that track the shares of large companies beat their benchmark last year, half of the rate notched in 2015, underscoring the struggles for active managers that face increasing competition from passive funds.

Just 19 per cent of large-cap mutual fund managers clocked returns that exceeded that of their benchmark in 2016, compared with 41 per cent in the previous year, according to data compiled by BofA Merrill Lynch.

Growth funds, which aim to invest in stocks with above-average price increases, had the worst go of it last year, with only 7 per cent beating the Russell 1000 growth index, which pulled in a total return of roughly 7 per cent. Value funds that seek stocks with steadier price performance and heftier dividends performed better, with 22 per cent topping the Russell 1000 value index that returned 17 per cent.

Overnight Dow Jones closed up 65 points.New High Continues….

Stocks gained Thursday, the Nasdaq joining the Dow, S&P 500 and Russell 2000 in record territory as all four indexes hit new all-time closing highs.

After a quiet start, major U.S. stock indexes jumped in afternoon trading as the market built on a surge the previous day. Banks and basic materials companies made the biggest gains, and technology companies also climbed. Defense contractors and other industrial companies took losses.

The small-stock Russell 2000 surged 1.5%.

Meanwhile the Dow Jones industrial average ended up about 65 points, or 0.3%. The Standard & Poor’s 500 index rose 0.2%. The Nasdaq composite jumped 0.4%.

These are the new closing highs for the four indexes:

► Dow: 19,614.81
► S&P 500: 2246.19
► Nasdaq: 5417.36
► Russell 2000: 1386.37

U.S. government bond prices fell, sending yields higher. The yield on the 10-year Treasury note rose to 2.40% from 2.34%. That drove banks stocks up since higher interest rates will allow banks to charge more for lending money. Goldman Sachs (GS), which has surged 32% since the presidential election and is trading at a nine-year high, was up 2.5%, and Bank of America (BAC) picked up 1.7%.

European stocks climbed for the second day in a row. Germany’s DAX index was up 1.8% and France’s CA 40 index gained 0.9%. London’s FTSE 100 rose 0.4%.

Overnight US Market :Dow closed above 19000 + 67 points

Get out the Dow 19,000 rally caps. The Dow Jones industrial average, arguably the world’s best-known stock market gauge, closed above the 19,000 barrier Tuesday for the first time in its 120-year history.

For the second straight day, all four major U.S. stock indexes touched new record-high territory. The Dow jumped 67.18 points, or 0.4%, to close at a record high of 19,023.87.

In a day of milestones, the benchmark Standard & Poor’s 500 stock index closed above 2200 for the first time ever as it rose 4.76 points, or 0.2%, to 2202.94. The Nasdaq composite rose 0.3%, to an all-time closing high of 5386.35 and the Russell 2000 gained 0.9% to 1334.34, its thirteenth straight session of gains — its longest winning streak in 20 years.

The assault on Dow 19,000 has taken nearly two years, or 700 calendar days, since it took out the 18,000 barrier back on Dec. 23, 2014. It was the slowest climb from one 1,000-point milestone to the next since taking nearly six years to climb from 14,000 in July 2007 to 15,000 in May 2013. (That long drought, of course, coincided with the Great Recession and the worst stock market decline since the Great Depression.)

Dow 19,000 is the latest signal that the rally sparked by Donald Trump’s surprise presidential election win is broadening as investors continue to bet on the prospects for a more investor- and business-friendly White House and Congress.

Whether the bullish hype turns out to be the right trade remains to be seen, as Trump has yet to get the keys to the White House or make one of his campaign promises come true.

Overnight US Market :Dow closed -12 points.

Stocks closed mixed to modestly lower Thursday as traders await Friday’s key jobs report and digest oil’s climb back above $50 per barrel and a continued drop in the British pound on Brexit fears.

The Dow Jones industrial average fell 12.53 points, or 0.1%,to 18,268.50, according to preliminary calculations. At one point the blue-chip index was down as much as 118 points. The Standard & Poor’s 500 stock index was up 1.04, or 0.05%, to 2160.77 and the Nasdaq composite fell 9.17, or 0.2%, to 5306.85.

Stocks rallied Wednesday, ending a two-day losing skid, enabling the Nasdaq to climb within 0.4% of a fresh record high and putting the Dow and S&P 500 within 2% of their August peaks.

Wall Street is in a holding pattern ahead of the release of the September jobs report  Friday. Analysts are forecasting job gains of 170,000 to 175,000, following the creation of just 151,000 new jobs in August. A strong jobs report could give the Federal Reserve more reason to hike interest rates later this year for the first time in 2016. Low rates and borrowing costs have been a key driver of stock gains in the current bulll market, now well into its seventh year.

Rising long-term bond yields in the U.S. may also be weighing on stocks. The yield on the 10-year Treasury note jumped to 1.739%. Rates appear to be heading higher as odds of a late-year Fed rate hike remain firm.

Overnight US Market :Dow Closed + 133 points ,S&P 500 +14 Ppoints

U.S. stocks rallied Tuesday following the first presidential debate, as investors digest the first face-off between Hillary Clinton and Donald Trump.

In the first trading session following the first of three face-to-face battles between the Democratic and Republican nominees for president, stocks broke a two-day losing streak, suggesting that markets are giving the first-debate decision to Clinton, although far from a knockout.

In general, Wall Street views Clinton as a more favorable candidate, as she and her policies are viewed as more of a known quantity than Trump, who investors view as a candidate that would inject more uncertainty into financial markets given his views on trade, immigration and other issues.

The Dow Jones industrial average rose 133 points, or 0.7%, to close at 18,228. The broader Standard & Poor’s 500 stock index gained 0.6% to 2160 and the Nasdaq composite index  rose 0.9% to 5306.

Stocks were also reacting to good news on consumer confidence. The Conference Board reported that its index of consumer confidence this month jumped to a nine-year high of 104.1, which was better than August’s 101.8 reading and consensus for September of 99. In housing news, the S&P CoreLogic Case-Shiller 20-city price index was flat in July, in line with estimates, and “consistent with the moderate recovery in the housing market.

Overnight US Market :Dow closed +240 points.S&P 500 +31 points

Stocks closed sharply higher as investors downgraded the chances of an interest rate hike next week after market-friendly words from a key Federal Reserve official who urged “prudence” and said the case for a “preemptive” hike was “less compelling.”

The Dow Jones industrial average closed up 239.62  points, or 1.3%, to 18,325.07, erasing more than half of Friday’s nearly 400-point rout sparked by fears of a rate hike next week. The broader Standard & Poor’s 500 index finished up 1.5%, or 31.23 points, to 2159.04, shaving off more than half of its 2.45% drp Friday. The technology-packed Nasdaq composite rose 85.98 points, or 1.7%, to 5211.89.

The rally followed a key speech from Lael Brainard, a member of the Fed’s Board of Governors. She is considered a Fed “dove,” or someone that favors a cautious approach to rate hikes; investors feared Brainard might push for a rate hike next week like other Fed officials have leading up to the meeting. But her comments suggested that she was still wary of a rate hike next Wednesday.