An investor would be well served to ignore the buy, sell or hold recommendation S&P attaches to each of the reports, instead looking at the growth in earnings, debt levels and the return
on equity rates for past several years.
Not exact matches
Some
equity analysts lowered
ratings on Canadian companies they previously believed might be takeover targets (Talisman Energy, for example), invoking the logic that the Petronas - Progress blockage would drive foreign buyers to shop elsewhere.
That data raised a fresh round of questions about how the Federal Reserve will proceed
on further cutting back
on its massive monthly bond purchases, which have kept long - term
rates low and encouraged a strong rally
on equity markets.
significant changes in discount
rates,
rates of return
on pension assets, mortality tables and other factors could adversely affect our earnings and
equity and increase our pension funding requirements;
When the Federal Reserve boosts its target funds
rate, banks are quick to follow suit by increasing the cost of borrowing
on everything from credit cards to home
equity lines of credit.
Shareholders»
equity of $ 22.979 billion decreased 3 % from year - end 2017 due to the impact of higher interest
rates on net unrealized investment gains.
As for «peak earnings,» Michael Wilson, chief U.S.
equity strategist and CIO of Morgan Stanley Wealth Management, said in a note to clients
on Sunday that» [W] e think the market is digesting the fact that the tax cut last year has created a lower quality increase in US earnings growth that almost guarantees a peak
rate of change by 3Q.»
Mortgages aren't the only debt Canadians are saddled with, however, and the
rates on credit cards, car loans, and home
equity lines of credit could tick up as well, further increasing a household's overall carrying costs.
The upside is the interest
rate on a home -
equity loan will be among the lowest available.
Twenty - three percent of respondents had an «overweight»
rating on Japanese
equities, the highest level seen in the last two years.
What we've seen
on the
equity side is that they've been boosted by this low -
rate environment, and the current slow pace.
Consider that current
rates on home
equity loans are 5.57 percent, according to Bankrate.com.
I do think, as you put it before, that the
equity market does rely
on us having somewhat lower
rates and the Fed normalizing policy fairly gradually.
We've seen
rates really move higher
on a year - to - date basis and vacillate and that's had a ripple effect into the
equity markets.
We have no corporate solution to this problem; high inflation
rates will not help us earn higher
rates of return
on equity.»
The agency commissioned a survey that found 720,000 families would struggle to make payments
on their home -
equity loans if interest
rates rose by a mere 0.25 percent, and almost one million would be in trouble if borrowing costs rose a full percentage point.
When this index exceeds the
rate of return earned
on equity by the business, the investor's purchasing power (real capital) shrinks even though he consumes nothing at all.
Equity analysts charged with evaluating publicly traded companies can fall victim to herd mentality, and by slapping a «sell»
rating on a company or issuing a critical report, an analyst risks getting cut off by management.
Jason Helfstein, Oppenheimer managing director of internet
equity research, told CNBC's «Power Lunch» he still has an outperform
rating on Yahoo.
In the near term, higher interest
rates will have an immediate effect
on consumers with credit card debt, home
equity lines of credit and those carrying adjustable
rate mortgages.
Atlantic
Equities initiated coverage with an overweight
rating and a $ 160 year end price target today, but they made no comment
on how it might open or trade initially.
Because
equity investors — that tend to get what they ask for — increasingly are saying enough is enough, and a lot of releveraging activity was front loaded, and with an expected more benign
rate hiking cycle there is less urgency to pull the trigger
on deals, we continue to think that corporate balance sheets (ex-energy, ex-materials) will improve in 4Q and into 2016.
«The cumulative effect of interest
rate hikes is going to begin mounting,» said Greg McBride, Bankrate.com's chief financial analyst, particularly
on variable -
rate loans such as credit cards, home
equity lines of credit and adjustable -
rate mortgages, which could rise within one to two statement cycles.
WHO: David Shore, associate dean and faculty member at Harvard University, where he teaches the course «Strategic Marketing: Gaining Competitive Advantage Through Positioning and Branding»
RATING: 7 (
on a scale of 1 to 10, with 10 being the highest) «They have enormous
equity in the purchase of the Dr. Spock name.
It's operating from a position of strength and in 2016 saw operating return
on equity of 13.3 %, consistent with its performance over the decade despite historically low interest
rates.
«S&P 500 price - to - earnings is demanding excluding mega-caps and likely dependent
on interest
rates staying low versus history,» says David Bianco, chief U.S.
equity strategist at Deutsche Bank.
Stock markets have been rallying for months in anticipation of sharply lower tax
rates for corporations, with Wall Street's three major
equities indexes closing at record highs
on Friday.
Another factor: In January, to the horror of the private
equity world, the Ohio Bureau of Workers» Compensation asked a state judge for permission to publish information
on the VC firms in which it invests — including company valuations and
rates of return.
For founders
on this path, the 20,000 - square - foot center provides offices and wet chemistry and microbiology labs at below - market
rates ($ 23 per square foot for office space, $ 25 for labs); alternatively, founders can exchange a small percentage of their
equity or future revenue for use of the space.
Software companies usually sell at larger p / e ratios because they have much higher growth
rates and earn higher returns
on equity, while a textile mill, subject to dismal profit margins and low growth prospects, might trade at a much smaller multiple.
yields will hit the highs
on close end of the day...
equity markets setting up to be slammed tomorrow maybe but today they have run over weak shorts in the face of
rates... the federal reserve see's this and again will wonder if they are behind
on hikes, strong data, major expansion in credit, lack of wage growth rising bond yields and ballooning debt...
rates will go much higher and
equities will have revelations as to what that means for valuations
-- People seem hung up
on the $ 1.5 MM house, but the example family has a lot of
equity, and a very low mortgage
rate.
Consider, the many different channels of potential Brexit influence — not only the impact
on international trade and global interest
rates and currencies, but also
on bank
equity prices and
on political uncertainty.
Some examples: in the presence of full expensing, a corporate
rate reduction has no effect
on the cost of capital for
equity - financed investments and raises the cost of capital for debt - financed investments.
During times of recession the economy is stimulated with low interest
rates and once they get low enough, the yield
on bonds and other fixed investments becomes so unattractive that money starts to flow into
equities.
Our three - year average burn
rate, which we define as the number of Shares subject to
equity awards granted in a fiscal year divided by the weighted average Shares outstanding for that fiscal year, was 2.17 % for fiscal years 2016 through 2018 (see chart
on page 60 for detailed calculation of our three - year burn
rates).
«They are getting even leaner,» said Chris Wheeler, analyst at Atlantic
Equities LLP in London who has an overweight
rating on the bank's shares.
But
equity loan
rates generally are one to two percentage points higher than
rates on cash - out refinances because loans are a second lien — rather than a first — against your home.
Traditionally, global
equities do not peak until after the yield curve has inverted, he adds, but «given the very low -
rate nature of this cycle, we'd expect a flat curve to weigh more heavily
on sentiment and encourage a more defensive rotation.»
Spending
on commissions by its $ 21 billion
Equity Dividend Fund increased by 39 percent from the 2014 to 2016 fiscal years, but the fund's transaction activity more than doubled, meaning that its commission
rate overall decreased considerably.
We suspect that much of the projected growth benefit from corporate tax reform comes from enacting expensing of equipment, which reduces the entity - level effective tax
rate to zero
on equity - financed investment and makes it negative if financed in part with debt.
However, there are two key safeguards in the
equity world that protect investors from companies having undue influence
on the
rating of their stock.
While
equities traders may see compensation rise by 7 percent
on average, the picture is mixed for employees
on fixed - income desks: Credit and commodities traders may suffer double - digit declines, while
rates and currency traders get a 5 percent boost, according to Options Group.
And that is a nominal
rate; if, for example, a government were to take
on excessive debt and inflate itself to regain solvency, real
rates of return could easily be negative for
equity holders.
Gross criticized the Siegel constant (a 6.6 % annual real return
on equities) as an artifact of a high U.S. 20th - century growth
rate that is unsustainable in the «new normal» economy.
Morningstar
ratings based
on risk - adjusted return and number of funds Category:
Equity Precious Metals funds Through: 03/31/2018
A reminder
on interest
rate front - it's essential to recognize that if one believes depressed interest
rates «justify» extremely rich
equity valuations, what one is really saying is that depressed interest
rates «justify» dismal subsequent returns
on stocks.
The most compelling point made by Gross is that the assumption of a 6.6 % real
rate of return
on equities in an economy that is only growing by 2 - 3 % is logically unsustainable.
On the other hand, it is important to note that the spread between earnings price ratios and real interest
rates are at near record levels, and that is a crude measure of the
equity risk premium.
i have 270k in
equity in my house, thinking of paying off the mortgage but probably does make sense since my
rate is 3.125
on a 30 yr.