The Dow continues to make new rally highs. To provide some perspective to the current Dow rally that began
just over one year ago, all major market rallies of the last 110 years are plotted on today’s chart. Each dot represents a major stock market rally as measured by the Dow. As today’s chart illustrates, the Dow has begun a major rally 27 times over the past 110 years which equates to an average of one rally every four years. Also, most major rallies (73%) resulted in a gain of between 30% and 150% and lasted between 200 and 800 trading days — highlighted in today’s chart with a light blue shaded box. As it stands right now, the current Dow rally (hollow blue dot labeled you are here) has entered the low range of a "typical" rally and would currently be classified as both short in duration and below average in magnitude.
The supply of foreclosed homes that banks need to sell is rising again, signaling further downward pressure on home prices in some parts of the U.S.
Mortgage analysts at Barclays Capital in New York estimated that banks and mortgage investors held a total of 645,800 foreclosed homes in January, up 4.6% from 617,286 a month earlier.
According to Barclays, the supply peaked at around 845,000 in November 2008 and then declined through 2009.(…)
Now the supply is rising again because banks are determining that many homeowners don’t qualify for loan modifications and are completing more foreclosures. Home sales also have slowed in recent months.
Barclays projects that the supply of foreclosed homes will rise to about 733,000 in April, then begin to decline again gradually. Foreclosed properties now account for roughly a fifth of all homes listed for sale nationally.(…)
Some think this is an inconsequential move. On the contrary, it shows that Beijing is serious about the problem and is willing to take all sensible actions to stem speculation. Serious, committed players’ generally rational behavior is often annulled by less sophisticated marginal players with motives other than profitability.
In a move to curb soaring property price, the State-assets watchdog on Thursday told major State-owned enterprises (SOEs) whose core business is not real estate to quit the market.
Except for 16 SOEs which are purely real estate developers, 78 enterprises under the direct supervision of the State Assets Supervision and Administration Commission (SASAC) will speed up restructuring and pull out of the property sector.(…)
Germany Is Open to IMF Aid for Greece Germany signaled it is open to supporting a joint bailout of Greece by European governments and the IMF should the country need assistance, as Greece pressed Europe for concrete help by next week. (WSJ)
The Yuan Scapegoat (WSJ)
Stronger yuan not tonic for US economy A stronger yuan would not be a tonic for the US economy or manufacturing and it would be a huge mistake to raise tariffs on imports from China to force a change in the yuan, says a US trade expert on Tuesday. (China Daily)
‘Chermany’ unites to weaken the economy (FT)
John Authers looks at why some believe there’s no threat of a China bubble (FT)
To Fill Budget Gaps, ‘Stealth’ Taxes Are Creeping Up For tax officials, indirect levies — or stealth taxes — are stable, less prone to be avoided and easy to collect. (NYT)
March Madness Scenes from a devolution as Democrats writhe toward 216 votes. (WSJ)
I wrote about the apparent recovery in RV demand in December. A turn in final demand may just be happening.
Winnebago Industries (WGO-N13.68-0.87-5.98%) posted its first quarterly profit in nearly two years as sales of its largest and most expensive motorhomes rebounded modestly, and its shares rose nearly 7 per cent.(…)
Winnebago said it was seeing renewed dealer demand for all its vehicles, but the resurgence was particularly pronounced for so-called “Class A” motorhomes – the biggest and most lucrative of its products.
Guangdong, the province that produces about a third of China’s exports, on Thursday announced plans to raise its minimum wage more than 20 per cent, fuelling inflation fears and dealing a blow to manufacturers emerging from the global credit crisis.
Consumer prices were flat in February—and even with volatile food and energy removed from the equation, the needle barely moved: Prices ticked up a scant 0.1%, the Labor Department said Thursday. Over the past year, prices have increased 2.1%, or 1.3% omitting food and energy, the smallest rise in six years.(…)
Thursday’s report showed weakness across a range of categories. Owner’s equivalent rent, a measure of home costs that is by far the CPI’s largest component, was flat in February. Weak home prices and a glut of homes for sale have held down shelter costs. Apparel fell 0.7% last month and personal computers fell 0.5%.(…)
Real average weekly earnings fell 0.2% in February from January. Over the past six months, average weekly earnings have been essentially unchanged.
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Demand for Costlier Properties Grows, but Total Sales Fell in February for the Second Straight Month
(…) California’s median home price rose 11.2% in February from February 2009, although home sales in the state slipped for the second consecutive month compared with a year earlier, according to a report released Thursday by MDA DataQuick, a La Jolla, Calif., housing-data provider.
The median home price increased to $249,000 in February from $224,000 a year earlier, DataQuick said. The median price rose 0.8% from January 2010. Home sales in the state fell 3.8% in February from a year earlier to 28,111 sales, but were up 0.9% from January 2010, DataQuick said.(…)
A rise in U.S. car sales during the first half of March is lifting expectations that totals for the month will show the industry’s recovery is picking up speed. (…)
My last market analysis (US EQUITIES VALUATION ANALYSIS: DUCK, YOU (HAPPY) SUCKERS!) was on December 8, 2009 when the S&P 500 Index was 1100.
The Index has been hovering around that level (+/- 5%) since then even though quarterly operating earnings have grown 10% QoQ, beating estimates and triggering continued positive earnings revisions. Nearly 75% of S&P 500 companies beat estimates in Q4 and more than half beat revenue expectations as revenue growth reached 7%. Corporate earnings guidance has also been positive.
