Word: stockely
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Late last week, Goldman Sachs cut its earnings expectations for the stocks in the Standard & Poor's 500. Collectively, Goldman thinks, those companies will earn $40 a share this year, down from $49 a share in 2008. That's a drop of 18%. Not great. But take out financial stocks, and the picture gets worse. Excluding banks, insurers and the like, Goldman is predicting an earnings plunge of 25% in '09. (See pictures of the stock-market crash...
What's more, financial stocks are also making the stock market look more attractive - or at least less ugly - to investors. The S&P 500 has a price/earnings ratio based on trailing 12-month earnings of about 15. That compares with a 10-year average P/E of 21. So the market's current valuation looks cheap. But some financial stocks like Bank of America and Wells Fargo have P/Es of 7 and 5, respectively. Take those out, and the market looks more expensive...
...also means relative calm can follow bouts of chaos. Though the causes of Monday's global sell-a-thon remain unchanged, by Tuesday markets had mostly digested it all - and began looking for ways to pick up, muddle on, and possibly find a deal to be had in dumped stock. One reason for the bargain hunting is that investors know inordinately depressed markets mean there are deals to be had. "Half of the companies on Paris' CAC 40 have seen their stock fall to less than their equity capital - which makes no economic or financial sense," Touati says. "markets usually...
...been tucked away around the world by people whose profit-taking will lift markets after big sell of periods, but that won't change the big picture," Touati says, "Only signs the U.S. has hit bottom and on the rise again will fuel a real rebound of international stock markets...
...brazen nature of the attack and its high-profile targets will sink Pakistan's reputation further, analysts say, driving away foreign investment and delivering a blow to the country's much-celebrated national sport. The Pakistani rupee and the main stock exchange both dipped at the news. "It's a very serious incident that escalates the present state of affairs," says Masood, the retired general. "It gives an idea of how the frontiers of terrorism are expanding in Pakistan. It also shows how Pakistan is vulnerable. It is no longer capable of hosting international events...