Happy Days are Here Again?
HOPE AND CONFIDENCE LAST WEEK triumphed over the forces of nuance and complaint. No, that's not the Bush administration's post mortem on the president's re-election, but a plausible take on the forceful rally that took hold in the stock market.
The broad market indexes vaulted to new highs for the year, continuing a two-week ramp on a happy confluence of political, seasonal, economic and psychological energy.
In addition to Wall Street's hoped-for result of a decisive win by the business- and investor-friendly George Bush, oil prices continued to pull back below $50 a barrel. November, too, begins the typically bullish portion of the calendar, which everyone knows and yet somehow still the pattern tends to occur.
Friday's unexpectedly strong employment report allayed some of those nagging concerns of a prolonged economic soft patch.
And, not least, professional investors staring at near-flat returns rushed in to buy, so as not to miss the kind of year-end rally that arrived a year ago.
The result was an impressive run right through the week's finish line. The Dow Jones industrials jumped 360 points, or 3.6%, to finish at 10,387, including a 72-point rise Friday.
The Standard & Poor's 500 gained 35, or 3.2%, to reach a new 30-month high of 1166. The S&P went vertical beginning two weeks ago as oil prices receded and investors started anticipating a post-election bounce. The benchmark is up 6.5% in nine trading days.
The Nasdaq has taken a mere supporting role lately, rising 63, or 3.2%, to hit 2038, its highest point since late June.
In a virtual imitation of the election, the market's upward thrust was a strong rebuke of the self-defined smart folks, those who prize intellect over received wisdom and assume that the majority is usually misinformed.
The obvious, facile, widely advertised trade worked. Sure enough, the day Bush declared himself a second-term executive, money raced into the pharmaceutical, defense, utility and tort target (tobacco and asbestos) sectors, just as the punters predicted.
No need to think three chess moves ahead, because the game being played was checkers.
The supposed smart money, roughly defined as the hedge-fund bloc, looks at free candy and immediately starts thinking of root canals. It was no different ahead of the present upside rush.
Robin Carpenter of Carpenter Analytics in Hanover, N.H., (
www.CarpenterAnalytix.com) keeps an eye on the implied equity market exposure of the Dow Jones Hedge Fund index members. He points out that they are like most groups of investors -- wrong when they are positioned at bearish or bullish extremes.
Just as this market move took flight early last week, the "tactical/directional" hedge funds -- whose managers are paid to get short-term moves right -- were registering their lowest exposure to stocks so far this year.
The chart of this gauge alongside one of the S&P 500 shows that hedge funds as a group end up chasing the market moves. This could mean, as Lehman Brothers technical strategist Jeff de Graaf put it last week, that the direction of the "pain trade" -- that which hurts the greatest number of investors, in the market's typical fashion -- is up for now.
The racetrack odds makers were busy admiring the rally's gait and posture in addition to its speed and distance traveled.
The encompassing breadth of the advance, the evident buying interest at every dip and the powerful surge in trading volume all favor the bulls, goes the reasoning. Technical and fundamental strategists alike were projecting near-term targets for the S&P 500 beginning with "12."
It's true that as people chase and jump on to a rushing bandwagon, they can add to its momentum for a while.
Allowing for the requisite pullbacks that help restore some buying power and give rise to some healthy fear, it may be that the next couple of weeks will hold little in the way of scheduled news to keep the technical factors at the fore.
Beyond that point (once the Federal Reserve has presumably bumped interest rates another rung higher next week), companies will begin offering progress reports on the fourth quarter.
The pattern of recent earnings forecast changes and current economic-growth expectations seem to indicate that the current quarter and 2005 projections seem to be a mite too high.
That's especially true given that analysts are implicitly penciling in substantial gains in profit margins above currently high levels. With the lagging impact of higher commodity costs and a potential increase in widespread hiring yet to be felt, that assumption could inject a bit of risk into the fundamental underpinnings for stocks.
There were other things that didn't matter last week but may again if the supposedly smart folks are to regain any credibility. Namely, the dollar was plastered on world markets.
Treasury yields jumped, which is bullish from a sentiment perspective until such unknown level when it becomes a hindrance to stocks. Fed rate hikes are now viewed as positive confirmations of economic strength, but when might they revert to being scary drains on market liquidity?
Also, it may be mere noise, but proxies for investors' risk appetites such as Google and Research in Motion -- which foretold the rally -- sat out the last part of it.
These are mere quibbles that complicate an otherwise simple bullish story, for the moment.
快乐时光再现？
上周，投资者的希望和信心彻底压倒了市场上的多愁善感和不满抱怨。但这并不是布什(Bush)的连任给股市注入了动力，而只是强有力的反弹在继续令人信服地持续而已。
随著两周来政治、经济、季节因素、心理因素上的一系列利好消息扑面而来，主要指数纷纷创出年内新高。
除了深受企业和投资者欢迎的布什总统不出华尔街所料获得连任外，石油价格也一直保持在50美元之下。而且，众所周知，11月一向是投资者的丰收季节，这一点并无任何改变的迹象。
上周五格外强劲的就业报告令很多投资者打消了对经济持续疲软的疑虑。不轻易放过丁点儿利润的专业投资者更不会错过这个已经初见端倪的年末反弹行情，去年的一幕让他们仍然记忆尤新。
结果是主要股指上周表现格外强劲。道琼斯工业股票平均价格指数跳升360点，收于10,387点，涨幅3.6%，上周五单日上涨72点。标准普尔全周上涨35点，涨幅3.2%，收于1166点的30个月新高。随著两周前油价逐渐回落，以及投资者开始预计大选后的反弹行情，标普指数早已展开飙升行情，9个交易日累计涨幅达6.5%。
那斯达克也获得了起码的支撑，全周上涨63点，涨幅3.2%，收于6月末以来最高水平2038点。
与大选结果类似，市场的上扬给了那些自作聪明的人当头一棒，他们总是把个人智力凌驾于共识之上，以为大多数人只能得出错误的结论。
这个显而易见、轻松实现、并在广泛意料当中的走势已经到来。的确，布什宣布连任总统当天，如投资者所料大量资金涌入了医药类、国防类、公用事业类以及涉及民事诉讼的烟草和石棉类股。但你无需走一步，想三步，因为操纵棋局的并不是你。
那些被粗略定义为对冲基金的游资通常都会对免费的糖果垂涎欲滴，而同时也不忘考虑一下他们的牙齿是否会过敏。在当前的上冲行情面前，他们的这种心态也没发生任何改变。
道琼斯对冲基金指数成份股公司Carpenter Analytics的分析师卡彭特(Robin Carpenter)始终都没有忽略市场的潜在风险。他指出，与多数投资者一样，当看涨或看跌观点过于一致时，他们的想法往往是错的。
就在上周初涨升行情逐渐展开之际，善于机变的对冲基金（基金经理们通常以短线业绩获得酬劳）的持股量却处于年内最低水平。从这一指标的发展趋势以及标普500走势图来看，对冲基金已经不再追逐市场的涨势。正如雷曼兄弟(Lehman Brothers)的技术策略师格拉夫(Jeff de Graaf)上周所说，这可能意味著将令多数投资者受损的人云亦云的趋势正在逐渐滋生。
很多预言家们正在沉醉于反弹的速度和可能实现的高度，并对反弹的步伐和走势津津乐道。市场的整体上扬、明显的买盘意愿、巨大的成交量增长，这一切都为看涨者提供了有利的支撑。技术和基本面策略师们已经将标普500的目标指向1200点。
当人们追赶并抓住一阵流行风潮时，他们在短时间内的确会光彩大增。但考虑到可能出现的必要调整行情，未来几周的消息面可能难以继续为技术指标提供支撑。
除了美国联邦储备委员会(Fed)可能在下周再度加息外，公司也将开始提供第四季度的业绩进展报告。收益预期正在发生变化，当前的经济增长目标似乎也表明，对本季度以及2005年的预期或许过于乐观。
特别是考虑到分析师不吝笔墨地预计利润率将较当前水平大幅提高，预期能否实现就更加值得关注。由于商品成本的提高仍将带来滞后影响，加之潜在的普遍就业增长迟迟没有呈现，过于乐观的预期很可能为支撑股市的基本面注入一定风险。
还有一些其他因素并没有在上周显露出来，但如果所谓的智者再度获得信任，这些因素也很可能对股市构成威胁。美元在全球市场遭受重创。美国国债收益率大幅上扬，这从心理角度讲应该对股市有利，但如果达到这种闻所未闻、已经对股市形成障碍的水平就另当别论了。Fed加息目前仍被视为对经济走强的肯定，但当他们变成流动资金恐慌出逃的动因呢？
也许这只是一家之辞，然而充分显现投资者勇气的Google和Research in Motion的股票，在引领了本轮涨升行情后却对后期上涨袖手旁观，这的确发人深思。
目前来看，这些观点也许有些牵强，只是对原本可能简单的牛市进行一种复杂化分析，但结果究竟如何，我们拭目以待。
