Posted
May 19 2008, 08:37 AM
by
Vinny Catalano, CFA
excerpts from this week’s report:
Model
Growth Portfolio (MGP)
“What can
I say? Yet
another strong relative performance week for the MGP (that makes it 7 out of
the last 8, 13 out of the last 15, and 15 out of 20 for the year) lifts the
year-to-date relative performance results at another yearly high: +2.57%. If
maintained for the full year, the MGP would beat the S&P 500 by 6.68%.
Doubtful, but you never know.”
Model
Growth Portfolio (MGP) Re-balancing
“Both adjustments in the MGP are largely influenced by the US domestic
political scene...”
ETF
Market Monitor
Econ. Sectors & Industries: Energy may have stolen the weekly
performance spotlight but Basic Materials (especially Steel) and Semiconductors
were the strongest winners.
Size & Styles: Mid Cap continues its recent
outperformance tear. Micro Cap still lags considerably.
Global: One word for Brazil – caliente!
Other: Despite Energy’s continued strong
performance, Commodities and Ag were big relative performance losers.
Expected
Return Valuation Model
“The US equity market sits right
around current fair value (-1.64%), thanks to the recent slight upward
adjustment in 2008 expected operating earnings. In that regard, reality has
finally sunk in with bottom-up analysts, as the data below shows with a drop
below $90 thanks to a downward revisions to 1Q08. It should be noted, however,
that bottom-up estimates still have a ways to go as second half earnings
expectations are still on the overly optimistic side (see following table)…”
Moving
Averages Scorecard
“Global markets led by emerging
economies are where the best absolute strength resides (70% positive ratings).
Further improvement puts the US economic sectors at the >50% level for the
first time in many months. That said, Energy has reached an extreme level as
the following chart shows…”
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