Billionaire fund managers are starting to come out with the dire predictions that bubbles are going to burst especially for those high flying stocks like biotech and social media (Why Twitter is even valued at the billions at all escapes me!) Anyway, they point to the rate rise that is sure to come this year, maybe as soon as June. I think many are going to be led to the same belief, and I am nearly about to agree, but not yet. Corporate earnings are not as dismal as we were led to expect, and as far as timing goes, we are still working through the earnings, so, me thinks, at least in the next week or so, the bull still got legs, just be careful not to tripped up with those overvalued companies.
So imagine if these undervalued companies (PE below 17) gets even more cheaper!
Here they are from last business day’s close
JPM (JP Morgan) PE is 11.66
XOM (Exxon Mobile) PE is 13.34
WFC (Wells Fargo) PE is 13.48
INTC (Inte ) PE is 14.19
AAPL (Apple) PE is 15.94
If you notice, we have come away from the steep oil price declines, so the feared job losses and investment loss is at least going to help sentiment in that industry. Looking back at the last few months when oil reached hysterical lows, the economy chugged along and it really didn’t help that much so, investment managers keen to pick up bargains will push the prices up once more and there’s a buying opportunity.
This week, the jobs numbers will be reported and it will probably show better numbers with the better weather. Will that mean better stock performance? Likely, it will be choppy. What I’ve observed is that the bad news gets greeted with more buying and good numbers inspire quick selling. No one wants to be left behind with a high-priced stock. In a little while, sell in May is under way.
http://www.bloomberg.com/news/articles/2015-05-04/gross-calls-bull-market-end-again-as-oxygen-running-out
