Category Archives: Equities

Shariah Indices Closely Track Conventional Benchmarks in 2013

S&P Dow Jones Shariah-compliant benchmarks covering the U.S., MENA and global equity markets performed in line with their conventional counterparts in 2013. In fact, the S&P 500 Shariah, S&P Pan Arab Composite Shariah, and the S&P Global BMI Shariah, each closed the year within 50 basis points of their non-Shariah counterparts – quite remarkable in Read more […]

Keep those flowers short on Valentine’s day

Historically (from 1928), as defined by the S&P 500, 52.1% of the trading days are up (average +0.745%) and 46.2% are down (average -0.789%).  For Valentine’s day there is a thorn. On February 14th the market has been up only 40.0% of the time and down 56.9% of the time (it was flat in 1944 Read more […]

Emerging Markets: Don’t Panic!

Currencies and equities across various countries classified as “emerging” have come under increased scrutiny in the past few weeks, with more excitable commentators seeing signs of a crisis. Should broad-based index followers be worried? Perhaps not. On the one hand, the tapering of U.S. quantitative easing has triggered flights of “hot money” from countries (like Turkey) that Read more […]

Inside the S&P 500: PE and Earnings Per Share

Two carefully watched numbers are the earnings per share (EPS) and the price-earnings ratio (PE) on the S&P 500.  Their popularity stems from the wide spread use of the index and its long data history.  EPS is the market analysts’ gauge corporate profits in the US while the PE is their measure of value.  While Read more […]

Why U.S. Investors Are Turning to Europe

The New York-listed iShares Europe 350 ETF has more than doubled in size in the past six months; the front page of last Friday’s Financial Times reported that U.S. purchases of European equities have surged, while the Wall Street Journal noted yesterday that “Europe is back.” European equities have underperformed U.S. equities by around 45% Read more […]

The Power of Dividends: Preferred Stock

Similar to fixed income securities, the U.S. Preferred Stock market has started 2014 with positive performance. The S&P U.S. Preferred Stock Index  (Total Return) ended January 2014 up 2.68% .  A good start given the S&P 500 Index (Total Return) was down 3.46%.  As a fixed income comparison the S&P/BGCantor U.S. Treasury Bond  7-10 Year Read more […]

Housing Finance: Déjà vu All Over Again

Bonds May Puzzle But Stocks Could be Worrisome Bonds: Just when people thought we were safe from creative financing applied to bonds backed by homes, a new improved approach is about to surface.  The past year has seen an increase in buying homes for rent by private equity funds and others.  The private equity buyers Read more […]

The Shrinking US Federal Budget Deficit

The US federal budget has a reasonable probability (our base case scenario) of reaching operational balance – revenues equal expenses excluding interest expense – by FY2015. This is an amazing turnaround and it means that budget deficit is now shrinking faster, meaning reduced supply of US Treasuries, even as the Federal Reserve tapers its quantitative Read more […]

Dispersion and Correlation: Which is “Better?”

We recently introduced the concept of dispersion, which measures the average difference between the return of an index and the return of each of the index’s components.  In times of high dispersion, the gap between the best performers and the worst performers is relatively wide; when dispersion is low, the performance gap narrows.  Today’s dispersion Read more […]