Category Archives: Blitzer’s Insights

S&P Dow Jones Raises Market Cap Guidelines for S&P 500

In a release on June 19th the S&P Dow Jones US Index Committee raised the market cap guidelines used when selecting companies for the S&P 500, S&P  Mid Cap 400 and S&P Small Cap 600. The new guidelines are: S&P 500: Over $4.6 billion, raised from $4 billion S&P Mid Cap 400: $1.2 to $5.1 Read more […]

Fed Proposes, Market Disposes

The FOMC statement and Ben Bernanke’s press conference was not well received this afternoon.  Hopes for something that would smooth over the recent volatility with assurances that QE3 would last for many more months to come were dashed by comments during the press conference that most FOMC members could see bond buying tapering off this Read more […]

Fed Meeting Report due tomorrow, Hints Bernanke will step down in January 2014

The Federal Open Market Committee — the Fed’s policy making unit — meets today and tomorrow.  Recent reports show the economy expanding, but not accelerating. Housing starts and consumer prices both slightly weaker than expected in today’s reports.  Given this and recent misplaced fears that the Fed was about to end QE3, most analysts look Read more […]

Indices Rebalance Friday

Index funds could experience slightly more trading than usual on Friday.  Company’s shares outstanding change from time to time due to buy-backs, issuance for employee options or other events. The percentage of shares in float — not closely held — also change from time to time.  In theory S&P Dow Jones could update data on Read more […]

IMF Cuts US Growth Forecast, Market Reacts

The IMF released its latest forecast of US economic growth and US economic policy this afternoon, sending the S&P 500 and the Dow into negative territory.  While the market response is likely to be forgotten by next Monday, the IMF’s comments are worth consideration.  The forecast sees 1.9% real GDP growth in 2013,  2.7% in 2014 Read more […]

Looking Back When Interest Rates Rose

With all the discussion about what might happen were interest rates to rise, it is worth looking at what has happened before. In 1994 the Fed tightened policy and interest rates rose faster and higher than investors expected.  The chart shows the yield on ten year treasury notes — the same instrument everyone is talking Read more […]

Stocks and Fed Fears

Only a month ago the market was in love with the Fed and Ben Bernanke was a hero for helping the market move from 1350 in November to about 1670 in May.  Now the central bank is a villain as the yield on 10 year treasuries tops 2%. Interest rates have risen in the last Read more […]

Thinking About P/E Ratios

The chart below is  a scatter diagram comparing the P/E ratio to the price return on the S&P 500 over the next ten years.  P/E is defined as each month’s level of the S&P 500 divided by the earnings per share on the 500 over the trailing 12 months. Both the P/E and the index Read more […]

Bubbles, Corrections, the Fed and Summer Heat

There is a growing debate among economists, journalist and bloggers over whether the Fed’s QE3 is creating a bubble in the stock market. (See Krugman, Gillian Tett or Felix Salmon among others) fueled by the market’s gains since the start of the year and the usual worries that disaster will strike during the summer break at the Read more […]