The Stock Market And The CAPE War

Have you ever wondered how billionaires continue to get RICHER, while the rest of the world is struggling? “I study billionaires for a living. To be more specific, I study how these investors generate such huge and consistent profits in the stock markets — year-in and year-out.” CLICK HERE to get your Free E-Book, The Little Black Book Of Billionaires Secrets On the above chart, we see that the recent decline took the financials to the previously broken resistance level of 130. Despite this fact, the financials still remain above this level, which also corresponds to the 2011 top, and the outlook hasnt changed here. The breakout above the level of 130 has not been invalidated, which will likely lead to further growth in the financial sector and the general stock market.

Even Mr. Siegel uses in his analysis a figure that is an important component of my analysis that real GDP growth, on a year-over-year basis, will continue, over the next five years or so, to grow only in the 2.0 percent to 2.5 percent range. Siegel introduces this figure in determining his estimate of the real interest rate. He writes, Real interest rates (and hence yields on inflation-linked Treasury bonds) are strongly tied to GDP growth and if the “new normal” growth pessimists are right, real interest rates are unlikely to rise above 2.0 percent.” Note: that all Siegel’s further analysis that supports his position that the stock market is not overvalued hinges on this assumption of 2.0 percent growth of real GDP. In my analysis, if real GDP only grows by 2.0 percent over the next five years or so, current levels of earnings cannot be sustained.

Report: 2 Stock-Exchange Rivals in Merger Talks

The Nasdaq composite rose 19.09 points, or 0.5 percent, to 3,657.79. The Nasdaq exchange was closed for most of the afternoon Thursday due to a technical glitch. The S&P 500 has fallen almost 3 percent from its record close of 1,709 on Aug. 2, but is still up 16 percent for the year. The Dow fell for six straight days through Wednesday, its longest losing streak of 2013. It’s still up 15 percent for the year.

Stock Market Closes Higher; Microsoft Surges

Horton lost 55 cents, or 3 percent, to $18.73 and Lennar fell 96 cents, also 3 percent, to $32.60. A boom in housing has supported this year’s rally in stocks. Now, the drop in sales has traders worried that the U.S. housing recovery could falter because of higher mortgage rates. Traders reacted to the drop in home sales by buying bonds and gold, investments that become more attractive when the economy appears weaker.

Stock market waffles after big drop in home sales

A merger of BATS and Direct Edge would create the No. 2 U.S. operator, behind New York Stock Exchange owner NYSE Euronext Inc. and ahead of Nasdaq OMX Group Inc., the Journal said, accounting for 20 percent of the market.

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