Green Book May 1998
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Featured Articles
April Mutual Fund Flows
Net inflows into U.S. equity funds for April are estimated to be down slightly from March but still running almost 40% ahead of a year ago.
April: Earnings Cross Currents
Late April preliminary real GDP estimate was a strong 4.2% gain, with the lowest inflation adjustment in 34 years. The price index for gross domestic purchases was unchanged from the prior quarter for the first time since 1954.
Asian Emerging Markets...Adding To Our Portfolio
Looking for a potential double? Take a look at our Asia Pacific market opportunity index. High risk markets, but still down big (adding in May). Risk is tempered by the beating these markets have taken.
Bond Market Summary
Near term, bond market now stabilizing after being roughed up during most of April…We see no imminent Fed loosening or tightening in the cards at this point.
Dividend Discount Models...Sensitive: Handle with Care
A March 30, 1998, WSJ piece reflects the optimism of this market, substituting earnings for dividends and ignoring any potential equity risk premiums.
Earnings Momentum Update...Signs of Slowdown
There are signs of an earnings slowdown especially within the big cap arena...small cap earnings have held up relatively better.
Joke of the Month
In April, readers sent in an unusually large amount of material relating to gender differences. The two runner-up jokes also involve the battle of the sexes.
P/E Ratios and Low Inflation...Revisited
Some clients suggested that our use of normalized earnings distorted last month’s study of P/E ratios in low inflation environments. Using a three year centered average of earnings produces results quite similar to last month’s study.
Scanning the Markets
Interest rate jitters certainly had its impact felt among the sectors, with some of the interest sensitive groups getting hit hard.
View From the North Country
If you’ve been in this business 30 years you’ll remember Adam Smith’s “The Money Game”. Read it again. Those who never read it, find a copy. Also, the results of our 1998 reader survey and a parody worthy of the “Bawl Street Journal” provides the first totally honest daily stock market report.
Worth Noting
Stock market volatility, U.S. savings rate, gold stocks, Y2K, the software engineer shortage and stock options.
Table of Contents
Stock Market
- April: Earnings Cross Currents
- Earnings Momentum Update...Signs of Slowdown
- April Mutual Fund Flows
- Worth Noting
- Dividend Discount Models...Sensitive: Handle with Care
- View From the North Country
Of Special Interest
Macro Monitor
Equity Strategies
At Random
April Mutual Fund Flows
Net inflows into U.S. equity funds for April are estimated to be down slightly from March but still running almost 40% ahead of a year ago.
April: Earnings Cross Currents
Late April preliminary real GDP estimate was a strong 4.2% gain, with the lowest inflation adjustment in 34 years. The price index for gross domestic purchases was unchanged from the prior quarter for the first time since 1954.
Asian Emerging Markets...Adding To Our Portfolio
Looking for a potential double? Take a look at our Asia Pacific market opportunity index. High risk markets, but still down big (adding in May). Risk is tempered by the beating these markets have taken.
Bond Market Summary
Near term, bond market now stabilizing after being roughed up during most of April…We see no imminent Fed loosening or tightening in the cards at this point.
Dividend Discount Models...Sensitive: Handle with Care
A March 30, 1998, WSJ piece reflects the optimism of this market, substituting earnings for dividends and ignoring any potential equity risk premiums.
Earnings Momentum Update...Signs of Slowdown
There are signs of an earnings slowdown especially within the big cap arena...small cap earnings have held up relatively better.
Joke of the Month
In April, readers sent in an unusually large amount of material relating to gender differences. The two runner-up jokes also involve the battle of the sexes.
P/E Ratios and Low Inflation...Revisited
Some clients suggested that our use of normalized earnings distorted last month’s study of P/E ratios in low inflation environments. Using a three year centered average of earnings produces results quite similar to last month’s study.
Scanning the Markets
Interest rate jitters certainly had its impact felt among the sectors, with some of the interest sensitive groups getting hit hard.
View From the North Country
If you’ve been in this business 30 years you’ll remember Adam Smith’s “The Money Game”. Read it again. Those who never read it, find a copy. Also, the results of our 1998 reader survey and a parody worthy of the “Bawl Street Journal” provides the first totally honest daily stock market report.
Worth Noting
Stock market volatility, U.S. savings rate, gold stocks, Y2K, the software engineer shortage and stock options.
Stock Market
- April: Earnings Cross Currents
- Earnings Momentum Update...Signs of Slowdown
- April Mutual Fund Flows
- Worth Noting
- Dividend Discount Models...Sensitive: Handle with Care
- View From the North Country