The average dispersion between S&P 500® stocks over the twelve months of the year was just below 5%, which is the lowest value across the 23-year data.
In such circumstances, the relative value of active management in the equity markets is constrained. Simply put, accurate bets deliver less alpha.
Based on calculations by The Wall Street Journal, Goldman Sachs employees are sitting on more than $600 million in extra bonus money, for the past year alone, thanks to the bank’s surging stock price.
(Source: Wall Street Journal)
That is the startling lifetime accuracy of the Super Bowl Predictor of the stock market. This year, it predicts the Dow will rise for 2014 in the event of a Seattle or San Francisco win and drop if the winner is Denver or New England.
(Source: Wall Street Journal)
The U.S. government’s revenues outpaced spending by $53.22 billion in December, the first surplus for the month since the 2007 fiscal year and the biggest on record.
(Source: Wall Street Journal)
The Fed has begun tapering asset purchases, starting with $10 billion in January, split evenly between U.S. Treasuries and mortgage-backed securities. If the Fed continues to taper by an additional $10 billion at each meeting, QE3 would end in October 2014, still providing liquidity throughout most of the year. The Fed is expected to keep short-term rates near zeor until at least 2015.
Pope Francis appointed 16 new cardinals who are under the age of 80 and therefore currently young enough to vote in a conclave to elect a future pope.
(Source: Wall Street Journal)
China’s imports rose the most in five months in December, indicating that domestic demand will support economic growth, as the government claimed the title of the world’s biggest trader of goods.
Inbound shipments advanced 8.3 percent from a year earlier, the customs administration said today in Beijing. Exports rose 4.3 percent, a pace that may be distorted by fake invoices. The trade surplus was $25.6 billion.
Improving demand will help support expansion amid risks from rising domestic debt and the impact of President Xi Jinping’s broadest policy reforms since the 1990s. While China said today it passed the U.S. to become the top trading nation in 2013, the government highlighted challenges for exporters including gains in the yuan and increased labor costs.
China already ranked No. 1 in goods exports in 2012 and was the second-biggest importer behind the U.S., according to the World Trade Organization’s annual report on international trade statistics. With $2.08 trillion in inbound shipments through November, the U.S. was poised to remain the world’s biggest importer in 2013.
China was fifth in exports of commercial services in 2012, behind the U.S., U.K., Germany andFrance, the WTO said. China was No. 3 in imports of services, behind the U.S. and Germany.
In economic size, China remains second to the U.S., with gross domestic product of about $8.2 trillion last year, about half that of the U.S.
The yuan rose 2.9 percent against the dollar last year, the most of 11 Asian currencies tracked by Bloomberg. It touched 6.050 earlier today, matching the level reached on Jan. 2, which was the strongest since the government unified the market and official exchange rates at the end of 1993.
The economy may have expanded 7.6 percent in 2013, according to a State Council report last month, the weakest pace in 14 years. Growth will slow to 7.4 percent in 2014, based on the median estimate of 48 economists surveyed by Bloomberg News last month, which would be the lowest since 1990.
(Source: Bloomberg)
281%
The stock of a little-known biotech company, Intercept Pharmaceuticals Inc., went up 281% on Thursday after the company’s liver-disease drug performed well in a clinical trial, marking the biggest one-day stock leap among Nasdaq Composite companies of a similar size since at least 2012.
(Source: Wall Street Journal)
Investors put record amounts into U.S.-listed equity mutual funds and exchange-traded funds in 2013 while pulling record amounts from U.S.-listed bond funds, according to data released by TrimTabs Investment Research on Tuesday. The record flows serve as one sign that investors are rotating their holdings from bond funds into stock funds, according to David Santschi, chief executive officer of TrimTabs. Investors put a net $352 billion into equity funds, eclipsing the previous record set in 2000. Meanwhile, bond funds saw a net outflow of $86 billion in 2013, beating the previous record set in 2013.
(Source: Marketwatch)
