Live Trading News’ Analysts’ agree this rally will extend into Y 2011

GS, UPS, AAPL, F

In Y 2010 the S&P 500 gained 6.5% in December alone, sending the benchmark above 1,251.70 for the is time since Sept. 12, 2008 when the index dropped 46% through March 9, 2009 on the back of the Lehman Brother’s bankruptcy.

The S&P 500, benchmark gauge for American equities, will rise 9.3% from its Y 2010 close to 1,374 in Y 2011, bringing the increase since the end of Y 2008 to 52%, the best return since Y’s 1997 to 1999.

More than 70% of S&P 500 companies exceeded analysts’ profit estimates in Q-3 Y 2010, the 6th straight period that many beat the Street’s projections, the longest stretch since Y 1993.

Balance sheets are the strongest on record, according to Goldman Sachs Group Inc. (NYSE:GS) citing data showing companies hold more than US$1T in cash, the most ever compared with the value of their assets.

The profitability and margins of US corporations are significant, Corporate earnings data is providing an increasingly positive trend, while the negatives are already known.

As concern that the economic recovery would stall eased, the benchmark measure of using S&P 500 options to hedge losses dropped. The VIX, as the Chicago Board Options Exchange Volatility Index is known, fell to 17.75 from Y 2010’s high of 45.79 in May.

Equities started climbing in July on better-than- estimated earnings at companies from United Parcel Service Inc. NYSE:UPS) to Apple Inc.(NASDAQ:AAPL) and Ford Motor Co. (NYSE:F) lifted confidence that the US economy is recovering.

The S&P 500 has climbed 20% since Fed Chairman Ben S. Bernanke’s August 27 speech in Jackson Hole, Wyoming, where he spoke of the 2nd round of Quantitative Easing (QE-2). The US central bank said in November it will buy an additional US$600B + of bonds through June, expanding on record stimulus of US$1.7T in asset purchases.

I will be watching the 1st 5 days of trading in the new year carefully as a indicator of what to look for down the line…Paul A. Ebeling, Jnr. www.livetradingnews.com

Posted by Shayne Heffernan on Jan 1st, 2011and filed underLimelight, News & Events.You can follow any responses to this entry through theRSS 2.0You can leave a response by filling following comment form or trackback to this entry from your site