Weekend Reading for Equity Investors: Earnings, Elections, and More
As the third quarter came to a close, we suggested that the prevailing bullish stock market sentiment may fade as earnings were reported. Well, corporate earnings have taken center stage in recent weeks, and generally disappointing results and lowered guidance have, in fact, prompted equity investors to head for the exits. Further constraining risk appetites are the looming fiscal cliff in the United States, recession in Europe, and continued uncertainty in Asia Pacific. US equity investors can also be expected to stay on edge through the upcoming presidential election.
Here are some of the stories you may have missed recently.
An Earnings Inflection Point?
- Why the fiscal cliff may be the least of our problems. (Fortune)
- S&P 500 revenues come in light and earnings guidance disappoints. (FactSet)
What’s Next for Citigroup?
- Citigroup and Vikram Pandit: Pray as you go. (Economist)
- Not everyone expects a Citigroup break-up. (CNNMoney)
- Simon Johnson on running Citigroup without subsidies. (New York Times)
On Politics, Elections, and Stocks
- Does the US Presidential Election Impact the Stock Market? It depends who you ask. (Enterprising Investor)
- Damodaran on the implications for stocks as the dividend tax cliff approaches. (Musings on Markets)
Emerging and Frontier Markets
- The braking of the BRICs. (Forbes)
- Chinese stocks are trading like it’s 1999. (Economist)
- Looking beyond the BRICs. (New York Times)
- New frontier markets in Asia. (Deutsche Bank DB Research, PDF)
On Cash Flow, Dividends, and Buybacks
- David Rosenberg says that when markets drive the economy, cash flow is king. (Financial Times)
- Legg Mason’s Sam Peters is a value manager focused on free cash flow. (Enterprising Investor)
- Are high-yield stocks in bubble territory? (AllianceBernstein)
- Josh Brown on the buyback epidemic. (The Reformed Broker)
High Frequency Trading: Everyone’s Favorite Villain
- Felix Salmon on the problem with high frequency trading. (Reuters)
- The Chicago Fed shares its prescription for keeping markets safe in the era of high frequency trading. (The Federal Reserve Bank of Chicago)
- Man vs. machine: Buy-side firms using new tools to fight the algobots. (Institutional Investor)
Companies under Fire
- Where’s the shareholder outrage at HewlettPackard? (Bloomberg Businessweek)
- David Einhorn is taking aim at Chipotle. (Wall Street Journal)
Gurus, Strategists, and Other Thought Leaders Weigh In
- Jack Bogle advises, “Get out of the casino, own corporate America and hold it forever.” (MarketWatch)
- Jeremy Grantham expects 2013 to be “a really good year to keep your head down.” (Bloomberg Businessweek)
- Professors Shiller and Siegel offer dueling prisms for valuing stocks. (New York Times)
For more news and trends, visit the Equity Investments Community of Practice.
Please note that the content of this site should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute.
