Week Oct 29 2010 – Weekly Recap & The Week Ahead
“The crowd is most enthusiastic and optimistic when it should be cautious and prudent; and is most fearful when it should be bold.” Humphrey Bancroft Neill
1. U.K. GDP grows twice as fast as expected — Britain’s economy grew twice as fast as economists had expected in Q3, posting 0.8% growth on the back of a sustained recovery in services and construction.
2. Q3 Earnings Season Statistics — courtesy from Bespoke Investment Group, below are charts highlighting the current and historical earnings season “beat rate,” which is the percentage of companies that beat earnings per share estimates. The first chart shows how the beat rate has progressed since the third quarter reporting period started on October 7th. The beat rate moved above 70% last Friday, hit a high of 76.6% yesterday, and dropped to 74.1% after all of this morning’s numbers came out.
The second chart highlights the quarterly earnings beat rate going back to 1999.
3. New 52-Week Highs by Sector — another article from Bespoke Investment Group highlights the new 52-Week Highs broken down by Sector.
4. Foreclosure ‘epidemic’ spreads — the foreclosure crisis is intensifying across a majority of large U.S. metropolitan areas, according to a report by RealtyTrac. Though California, Nevada, Florida and Arizona are still the states hardest-hit by foreclosures, cities like Chicago and Seattle saw a sharp increase in foreclosure warnings this summer. RealtyTrac’s Rick Sharga characterized the trend by saying “the epidemic is spreading from the states at the ground zero of the foreclosure problems out into areas that hadn’t been previously affected.”
5. BoJ holds rate steady — the Bank of Japan held its key overnight call rate unchanged, as expected, and cut its growth outlook. Economic growth for the fiscal year through March 2011 is now expected to come in at +2.1%, down from the +2.6% forecast issued three months ago. The bank also moved its next policy meeting to Nov. 4-5 from a previously scheduled Nov. 15-16, setting up the meeting to immediately follow an expected QE2 announcement from the U.S. Fed on Nov. 3.
6. Bullish Sentiment Hits 2.5 Year High — The latest AAII sentiment survey showed a 2.5 year high in bullish sentiment at 51.6%. This is the highest reading since May 8th, 2008 and just shy of the all-time high in the S&P 500.
The week ahead — Economic data from Econoday.com:
