Tuesday June 3, 2014
Baker Avenue is a wealth management firm. The minimum investment is $500,000. Here is their latest update. Notice that it is a mix of both fundamental and technical analysis.
We are studying financial analysis in ACCT 3314. Intermediate accounting is a study of how financial statements are prepared.
We will take a look at this in class.
ECB = Ecropean Central Bank
http://www.ecb.europa.eu/home/html/index.en.htmlA
AAII American Association of Individual Investors
US equities finished higher for a second straight week in holiday-shortened trading. There was little change in the macro narrative and while the path of least resistance remained skewed to the upside, the market did struggle for direction ahead of some higher-profile, near-term events this week. The S&P returned 1.2% while the Russell 2000 was up 0.7%.
Close to eighty percent of the S&P is in an uptrend, as defined by a fifty day moving average above a two hundred day moving average. Stats like this reinforce our long term positive stance. Countering this trend is the fact that the market has narrowed out with fewer stocks leading the charge and small caps continuing to languish. Momentum is still tepid and our shorter term read remains “neutral with a positive bias”. The big story this week remained the unexpected strength in Treasuries (and thus lower bond yields), with the curve resuming its bullish flattening trend. We suspect it's more “flow” related but are watching developments closely. There was no "sell in May" this year as the S&P was up 2% for the month. The market is now trading at a 15.5x forward multiple with 11% EPS growth forecasted over the next three quarters…not overly aggressive but certainly there is little room for error. It will be important for the data to continue to accelerate in order to support the estimates. So far, so good. Sentiment gauges we monitor have bounced around all year with individual investors, as measured by AAII, seeing its biggest weekly increase since late April last week. Gold fell more than -3%, suffering its fifth straight weekly decline.
This week brings us Apple’s developer’s conference and the largest oncology conference of the year (ASCO). There will be no shortage of tradable headlines emanating from these events and most of us, outside of investor Carl Icahn, golfer Phil Mickelson and sports bettor William Walters, will need to wait for the press releases to act. The other big events this week include a much watched ECB meeting where some form of stimulus is expected, and the May jobs report on Friday.
Regards,
Simon Baker
Professor Elam 
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