Though corrections in the stock markets are always possible, and may even be occurring now, once again I don't see anything alarming to suggest they are over valued and over bought as claimed by some. The P/E, as imperfect a metric as it may be, of the S&P500 is 15.54 now vs 14.53 a year ago so it has increased but not alarmingly so. And the dividend yield of 2.53% is actually above a year ago of 2.50. The DJ Transports have actually fallen in P/E from 20.90 a year ago to 18.94 today with an increase in dividend percent to 3.72 from 1.56.
On the other hand the DJ Utilitys have risen in P/E to 22.42 from 14.95 a year ago, an alarming increase screaming correction to me. And the dividend has fallen from 4.05% to 3.10% which is also not a good sign.
There are a couple of mildly worrying things in the highs and lows as the NYSE last week (February 19-22) had two days with the number of new 52-week daily lows somewhat above 40, and I don't like to see that (The NASDAQ Composite had none.). Still, the number of 52-week daily highs were above 40 every day with three days above 100 (and 412 on Tuesday!), resulting in weekly highs of 576 (and I like to see this above 100) with 82 new lows (I like to see this below 100, which it is, but the highest number since the week ending December 17, 2010.) Needless to say, the breadth index was negative for both the S&P500 and the NASDAQ Composite).
So I only see a looming problem in the utilities but am watchful on other areas.
No comments:
Post a Comment