This is a NEW report from ISN that covers the French market. Fair values are calculated along with targets for Overvaluation and Undervaluation and the traditional percent current prices represent of fair value. This report will soon appear under the World Markets menu.
Adobe earns an increase in fair value due to higher rankings in revenue and earnings. Altria Grp earns a Buy consideration while HCI Grp earns a Sell consideration. Hold consideration continues to grow as previously rated Sell/Sell Watch consideration stocks drop back into fair value range. The market is back to market neutral valuation at 103.5% Fv for the total market, 101.1% for LargeCaps.
Does consumer confidence pull the stock market to higher levels or does the market make consumers more confident?
Probably a bit of both, but at what point do consumers/investors become over-exuberant.
The Total Market, LargeCap, DOW and SmallCap have moved into OverValued levels. Expectations are clearly higher than the companies’ ability to deliver at current levels. Revenues, earnings and dividends will need to accelerate before investor’s begin to realize expectations are higher than current reality. This does not mean an economic slowdown is coming nor that there is a large market correction on the horizon. It does mean expectations need to be realigned to match current financial conditions. Market returns may begin to slow or adjust to current financial conditions.
The largest change in allocation goes to Financials with a 1.2 point increase. Other increases went to Consumer Staples 0.6 points; Utilities 0.6 points, Industrials 0.3 points and Telecom 0.2 points, Reductions occurred in Materials (0.3) points, and Consumer Discretionary (0.2) points.