Are equity prices to high?
Last week I attended the SIC conference. For you who want to view, you can still get access. The speakers were great. SIC 2021 – Strategic Investment Conference – Mauldin Economics.
There were many main topics that were discussed, but the theme was more macro than micro. Ideas, themes, and lots of discussion filled the two-week virtual conference. The main theme and question that everyone was asked was this. Are equity prices in a bubble?
The answers were about half yes and half no, all siting different metrics and economic theory to defend their answers. Howard Marks of Oaktree emphatically stated that “NO” we are not in a bubble. Read his note to investors from this year. For more information.
Crypto was in the news last week. Elon Musk and others realize that not all blockchains are the same. Some of the originals are not as good for the environment. In todays focus on out environment the energy loving blockchains are getting a beat down. BTC went from a high of around $64K USD and at the time of this writing, is trading around $45K USD, around a 30% decline in the price. Some other well known blockchains followed suite, especially the Proof of Work (PoW) blockchains. Proof of Stake (PoS) blockchains, use much less energy than PoW blockchains. So when a technology celebrity starts to talk, the selling and buying starts to happen.
One blockchain that did very well this past week was Cardano. https://cardano.org/ This little coin is what people call Blockchain 3.0; a coin that took the time to get it right. It is secure, fast, and energy cheap. The Coin is called ADA and just like Ethereum, you can write smart contracts, NFTs, and use the coin as a storage of wealth. Going from $1.50 low last week to a high of $2.50 points that people are starting to take notice.
Last week Mark Cuban tweeted the Internet and asked what ADA is good for.
Then Charles Hoskinson, the Cardano Master, replied to Mark with this video. https://youtu.be/C_9bxJUjGsc Asking him to come on down to the farm and let’s discuss. Will Mark Cuban meet up with Charles Hoskinson? I hope so. The Cardano blockchain is a favorite of mine and the good that it is doing in the word is extraordinary.
Happy Monday. Good Luck out there this week.
Global Spotlight
Israeli ground operations in Gaza. Israel is building up the forces necessary for a ground operation, potentially as early as next week, as its attempts to restore military deterrence against rocket attacks from Palestinian militants.
A U.S.-Russia meeting in Iceland. On May 20, U.S. Secretary of State Antony Blinken and Russian Foreign Minister Sergei Lavrov will meet on the sidelines of the biennial Arctic Council ministerial meeting in Reykjavik, Iceland.
A race to conclude U.S.-Iran nuclear talks. Negotiators in Vienna hope to conclude nuclear talks before the International Atomic Energy Agency (IAEA)’s temporary agreement with Iran expires on May 21.
A new global plan for net-zero emissions by 2050. On May 18, the Paris-based International Energy Agency (IEA) will release a new special report titled The World’s Roadmap to Net Zero by 2050.
An attempted Mars landing by China. The China National Space Administration (CNSA) announced that the Tianwen-1 space probe will attempt to land on Mars sometime between May 15 and May 19.
Stratfor.com
Economic Calendar
Briefing.com has a good U.S. economic calendar for the week. Here are the main U.S. releases.
Briefing.com
Last Weeks Numbers
Review Last weeks numbers here.
Jill Mislinski noted, “The S&P 500 fell three out of five days this week and closed Friday up 1.49% from Thursday. The index is 1.4% and is up 11.1% YTD, just slightly less than 12.7% last Friday.”
Earnings
Source I/B/E/S data from Refinitiv
Aggregate Estimates and Revisions
- 21Q1 earnings are expected to be 50.6% from 20Q1. Excluding the energy sector, the earnings growth estimate is 51.3%.
- Of the 457 companies in the S&P 500 that have reported earnings to date for 21Q1, 87.1% have reported earnings above analyst expectations. This compares to a long-term average of 65% and prior four quarter average of 76%.
- 21Q1 revenue is expected to be 12.9% from 20Q1. Excluding the energy sector, the growth estimate is 13.7%.
- During the week of May 17, 19 S&P 500 companies are expected to report quarterly earnings.
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