A Sparkling New High for the Dow
IN MANY JURISDICTIONS, YOU CAN BUY YOUR WAY out of a jam. Count Wall Street among them.
With a burst of buying that has carried the Dow Jones Industrial Average to an all-time record and the broader market to a decisive bull-market high, investors just might have bid their way out of serious suffering in the typically challenging months of September and October.
This is not the same as saying the indexes look poised to barrel higher from their current, somewhat extended position. That would require the help of still-more-ideal economic headlines and a hurried buy-in from under-invested players.
Instead, some sideways-to-downward chop in the market during the earnings-warning and reporting period probably should be expected. Yet the latest rally seems to have insulated the market from an immediate reversal and placed the burden of proof back on the bears.
Last week, the Dow ended the suspense and climbed above its former peak set in January 2000, rising 171 points, or 1.5%, to reach 11,850. The S&P 500 added 13 points, or 1%, to 1349. The Nasdaq rose 1.8%, to 2299. In a switch from earlier weeks, the small-cap Russell 2000 outperformed the headline indexes, advancing 2%.
Among the factors working in the market's favor: continued strength in financial stocks, particularly brokerage shares; a seasonal tendency toward year-end rallies, and an abiding reservoir of skepticism -- or, at least, lack of outright investor enthusiasm -- in the face of headlines blaring the Dow's achievement.
The strength in financials, inscrutable to many and, therefore, all the more demanding of respect, speaks for itself. While the main bank indexes might now be stalling, they'll have to show outright weakness to become a concern.
How About an Even Dozen? The Dow Jones Industrial Average at least surmounted its former all-time record, rising 171 points and coming to rest just 150 points shy of 12,000, as investors raced to bet on a fourth-quarter rally.
As for the seasonal patterns, Morgan Stanley strategist Henry McVey calculates that of the 25 Septembers since 1945 that showed positive returns, 22 were followed by positive fourth quarters. But the median fourth-quarter gain of 4.9% was somewhat smaller than in years when there was a September pullback. Just a guess, but if we don't get a correction fairly soon, any fourth-quarter rally might well peak early. In 2005 the year-end run peaked the day after Thanksgiving at 1268 on the S&P. Seven months later, that benchmark was lower.
Sentiment was almost all one needed to catch the rally from the mid-summer lows, as negativity was evident both in what investors were saying (calling for a correction) and doing (shorting stocks and buying put options). Ned Davis Research last week remarked that its sentiment indicator was more neutral than in months earlier and wasn't flashing a contrary signal either way. Davis' bottom line is that the market deserves the benefit of the doubt, unless the S&P cracks below the 1280-1292 range.
The most common quibbles about the rhythm and pulse of this rally were that it was narrowly focused on a minority of large stocks (with only a handful of Dow components near 52-week highs) and lacked impressive trading-volume support. This was true at least until Wednesday's rather furious rally-chasing burst of buying, when almost everything went up and volume surged.
Yet in March 1999, investors similarly held a vigil for the Dow's first close above 10,000. The week it finally got there, only six Dow components hit new 52-week highs, and the overall number of 52-week lows far exceeded the highs both on the New York Stock Exchange and Nasdaq. The Dow rose about 10% in about a month -- and that was about it, as the average stagnated for a year while the Nasdaq had its blow-off finale.
That's a history lesson, not a prediction. None of this speaks to any longer-term prospects for what remains a maturing and, until recently, plodding bull unless it proves otherwise. Without a doubt, the market has fed off of an abundance of good macroeconomic luck as it put together this run, with oil prices losing 20% and interest rates dropping precipitously. Reversals in those markets won't likely help.
For now, we seem to be in a see-no-evil period. If the housing market is on a path toward collapse, it is a slow-motion one and won't be declared such for some months. If economic numbers surprise to the downside, that would support expectations the Fed will be cutting short-term rates soon. For now, the consensus is undisturbed by the idea that some kind of financial or economic pain almost always precedes such a move -- or that all through 2000, most economists were expected a nice soft landing.
Third-quarter profit reports would appear to provide a decent excuse for a little retreat. Yet the prospects look pretty solid, thanks in part to easy comparisons with the Katrina quarter of 2005. Smith Barney's Tobias Levkovich notes that industry analysts and top-down strategists are close in their forecasts for the coming reporting season, often a sign the consensus forecasts are reasonable.
But looking into 2007, the analysts are miles more optimistic than the strategists in looking for a 10% gain in the first quarter (versus the strategists' 2%) and 14% for the full year.
So maybe the bulls' comeuppance, if it's to come, can be forestalled until the New Year, or at least until the market turns its sights to next year. If so, this would illustrate the difference between a reprieve and a pardon.
道琼斯指数创历史新高
在许多情形，钱可以帮你从困境中解脱出来。华尔街也是一样。
随着踊跃的买盘推动道琼斯指数创出历史新高，以及其它主要股指也纷纷创出牛市高点，投资者终于从9、10月这两个通常表现低迷的月份中解脱了出来。
并不是说股指注定会在目前已经上涨的基础上进一步走高。这可能需要更为理想的经济数据和仓位较轻的投资者大肆买进的帮助。
而且，预计在收益预警和公布业绩期间市场可能会横盘整理甚至下跌。由此看来，此番上涨将使市场不会立刻反转，同时也将验明正身的任务交给了看跌者。
上周，道琼斯指数结束了徘徊局面，突破2000年1月份创出的前高点，上涨171点，收于11,850点，涨幅1.5%。标准普尔500指数上涨13点，收于1349点，涨幅1%。那斯达克指数上涨1.8%，至2299点。小型股罗素2000指数一改前几周的疲弱，表现强于其他主要股指，上涨了2%。
有利于市场的因素包括：金融类股，尤其是经纪类股强势不改；年底反弹的季节性趋势，以及在道琼斯指数不断上涨时持久的怀疑论调──或至少是缺乏明显的投资热情。
金融类股走强本身就说明了问题。很多人对此难以理解，因而也就越发令人看重。尽管主要银行类股指数可能停滞不前，但只有表现出明显的弱势才会令人担忧。
就季节性模式而言，摩根士丹利(Morgan Stanley)策略师亨利?麦克维(Henry McVey)统计的结果是，1945年以来大盘共有25个9月份出现了上涨，其中有22次在第四季度继续上涨。但第四季度的涨幅中值为4.9%，低于9月份出现回调的年度中的涨幅。就此猜测，如果不能尽快出现调整，第四季度的反弹可能很快就会见顶。在2005年年底的反弹中，标准普尔指数在感恩节后次日见顶，当时报1268点。7个月后，该指数进一步走低。
若想摆脱仲夏时分的低位展开反弹行情，人气的配合必不可少。仲夏时节，市场状况是投资者的言行都呈现出明显的看跌趋势：投资者发出要求回调的呐喊声，并且正在作空股票、买入看跌期权。Ned Davis Research上周指出，目前其人气指标比数月之前更为中性，不论是看涨还是看跌，都没有发出相互矛盾的信号。这番话意味着Davis公司认为市场将从“宁可信其无”中受益，除非标普指数跌破1280点-1292点的区间范围。
对本轮牛市行情节奏和周期最常见的质疑是本轮牛市行情主要受益于少数几只大型股的提振（只有屈指可数的几只道指成份股位于52周高点附近），而且缺乏成交量的有效配合。至少在周三追涨买盘大量涌现、市场呈现普涨局面、成交放出巨量之前确实是这样一种情况。
1999年3月，投资者对于道指收盘能否首次突破一万点大关也像现在一样忐忑不安。道指当周收盘到达这个关口时，只有6只成份股创下52周新高，但不论是纽约证交所还是那斯达克市场，位于52周低点的股票数量均远远超过52周高点的数量。道指在随后的一个月里又上涨了10%左右，在之后的一年里便裹足不前，而那斯达克综合指数则在上演了最后的疯狂之后陷入沉寂。
不过，这只是历史，并不一定具有前瞻性。这并不能说明市场的中长期前景，市场目前仍处于一个成熟的、不久前还在缓慢爬升的牛市格局。毫无疑问，市场得益于一系列宏观经济利好消息的提振，如油价下跌了20%，市场利率大幅下滑。这些市场的行情一旦出现反转，将不利于股市的上扬。
眼下正是一幅太平盛世景象。即使房地产市场崩溃也将是一个缓慢的、持续数月的过程。如果经济数据出人意料的低迷，就将支持市场认为联邦储备委员会(Fed)即将减息的预期。目前来看，市场的普遍预期并未受到减息之前金融体系和国民经济往往出现这样或那样的不适的影响。
第三季度的收益报告看来可能为市场小幅回调提供良好的借口。但公司盈利前景看上去非常稳固，这在一定程度上要归功于上年同期卡特里娜飓风带来的低基数效应。美邦(Smith Barney)的托拜斯?勒夫柯维奇(Tobias Levkovich)指出，业内分析师和奉行由上而下分析方法的策略师对即将到来的业绩报告期的预期比较接近，这往往表明市场的普遍预期是合理的。
但展望2007年，分析师比策略师的看法乐观了不少。分析师认为明年第一季度企业盈利的增幅为10%（策略师预期的增幅为2%），全年的增幅为14%。
综上所述，牛市行情即使出现回调或许也要等到新年前后出现，或者说，至少要等到市场把目光放到来年时才能发生。如果是这样的话，投资者届时就可以看出回调行情是意味着熊市格局的到来，还是只是牛市行情中的一个小插曲而已。
Michael Santoli
