Market Discussion - What are your thoughts?
I recently read a report which highlighted how the American market space has changed over the last two decades. The two main points which were brought up were:
1.) The decreasing number of publicly traded firms. In 1996, there were ~11,000 firms which traded on NYSE as compared to 5600 today -a decline of almost 50%.
2.) The growth rate of the economy has been low - mainly due to the presence of more behemoth corporations than small independent firms. Smaller firms as a result of their size and lean operations would comparatively post better growth numbers as opposed to big corporations, where seeking growth becomes relatively hard.
In absence of dwindling growth, the big firms have resorted to booming M&A space to seek growth. Private investments into early stage ideas is another means by which the big firms and funds call first dibs on the promising ventures. As a result, a firm which would have IPOd at a much earlier stage 20 years ago, get easy access to private capital and IPOs at a much later stage - posting comparatively lower growth numbers.
In fact, the number of IPOs listed last year was almost 90 lower than the total number of IPOs in 1996. Private equity funds swoop up a majority of these promising startups - followed by a sales pitch to one of the big corporations - resulting in a hefty acquisition. Most of the big names have significant goodwill in the balance sheets, signifying overpaid assets.
My understanding is that the availability of easy money, lower interest rates and as a result easy capital for the PE funds drives these trends. PE is booming now. But if there is a big market correction - resulting in a significantly conservative monetary policy from the feds - PE industry will see a downturn soon.
Would love to hear thoughts.
Just my morning rant
Yields are artificially low, crowding funds into equities. Equities are largely overvalued but I agree with others that EPS (not going into buybacks etc) will keep them propped up into early 2018.
On the other hand given that medical is such an expenditure as a percentage of GDP I think that their could be unanticipated collateral damage to the economy.
Overall market trend and group tren (Originally Posted: 02/24/2016)
Hi people, i'm just reading some books this days and i have a little doubt. I've red one days ago that before you buy shares in some groups( materials energy etc) you have to watch the trend of the market. That's my dubt. What is and where i can find the trend of the market? I'm not talking about the trend of the different group ( like said before, materials energy and other stuff), i'm talking about overall trend market. In the last book that i've red, the writer talks about Dow Jones Industrial Avarage's chart, but i'm not sure that i've really understand this passage. Hope that you can help me. Thank you
The Dow Jones Industrial Average is only an average of 30 major companies. It's a widely quoted number and because the companies are very big and across different sectors it is used as an indicator of the entire market.
Current Market Discussion (Originally Posted: 10/26/2009)
For US markets, is there a psychological wall that is being hit at DOW 10000 or are we beginning to see retracement back to reasonable levels in the market? Considering a variety of factors such as incredible amounts of liquidity and lack of short positions, I believe that it is temporary sideways movement. However, there has been a lot of talk about the end of dollar weakness, overpriced assets, etc. Has it been just a bad couple of weeks or do people really believe a true reversal is coming? I understand people are on pins and needles and will run to dollars on something as simple as a Dick Bove downgrade of WFC, but when I say reversal I'm talking about a total end to this chapter of the rally that began in early March.
Interested to see what others have to say.
Someone on here must want to discuss something other than internship/b school applications
USA = Japan in 1990/91.....deficits will continue to rise over the coming decade (think medicare + social security + public option) and if a few treasury auctions fail --> watch rates soar and credit fall apart past current levels.
Commercial Banking will not recover until C&I loans bottom sometime in 2010 or 2011. If you read recent Fed reports, they are most concerned about the coming wave of C&I defaults. Until then, it will be hard for anyone to get credit outside of the debt markets. Things will be real bad if CIT defaults.
Since most commercial lenders are withholding capital for plain vanilla loans, many companies have been turning to the I-Banks to raise capital via formal debt or equity offerings. This has been and will continue to benefit the pure play I-banks (GS, MS, CS, Barclays in US, DB in US).
I'm optimistic about non-cyclical sectors like Technology, Healthcare and Consumer Non-cyclical. The recent deal flow in those sectors has proved their strength even in the face of the recession. The constant "churn" of innovation and branding in those sectors makes it always possible to find areas of strength. I also like anything involved with China and Brazil as they continue to grow and wean themselves off of exports. Not sure about India -- domestic demand needs to catch up.
Dollar will remain weak, especially with other foreign central banks raising rates (e.g. Australia).
Any thoughts?
Tomorrow’s Market Technical Trend (Originally Posted: 07/17/2012)
Markets ended on a flat note after amid volatility led by sustained selling for the whole session. Nifty future found strict resistance near 5250 and dragged below 5200. On daily charts, nifty is observed in correction phase where if it surpasses 5160 then it may test the next support of 5120. While, 5250 is still seen as key resistance for it and nifty needs to maintain above this level to gain strength and 5300 is observed as major resistance for it.
TREND: SIDEWAYS SUPPORT : 5160 & 5120 RESISTANCE: 5250 & 5300
I'll take a dozen!
really bro?
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