Wednesday, January 2, 2008

Ending 2007

Ending 2007

By Bespoke Investment Group | 26 December 2007

Updated Case-Shiller Median Home Price Data

October was an ugly month for home prices across the country, as all 20 of the cities that S&P/Case-Shiller tracks were down on a month over month basis. The Composite 10-city index was down 1.4% month over month and 6.7% year over year. The 6.7% year over year decline was the biggest fall in the index's history. As shown, San Diego was down the most month over month, followed by Detroit, Las Vegas and Phoenix. Chicago, New York and Portland were down the least from September to October, but they were still down. Only three cities (Seattle, Charlotte and Portland) remain up on a year over year basis, but these gains are falling rapidly. Below we highlight historical year over year monthly percent changes in the Case-Shiller median home price indices. The charts provide a great picture of the abrupt stop and subsequent fall in nationwide real estate prices.

Click Here, or on the image, to see a larger, undistorted image.

2007 Country Returns

With just two trading days left in 2007, 81.6% of the 87 countries highlighted below have equity indices that are up on the year. Aside from Zimbabwe, which is dealing with hyperinflation, the Ukraine, China and Bangladesh are up the most on the year, while Ireland, Venezuela and Puerto Rico are down the most. The US ranks 59th out of 87 as far as returns for 2007 go, with a single-digit gain of 5.48%. Other notables on the list are India (+46%), Brazil (+44%), Germany (+21%) and Japan (-9%).

Top Global Stocks Of 2007

Below we highlight the 25 best performing stocks of the Bloomberg World index in 2007. The Bloomberg World index contains 5,175 global stocks from 85 countries. As shown, Romanian company CMCM is up the most this year at 8,965%. CMCM is followed by Mongolia Energy and Nority International. One US company was able to crack the top 25. First Solar (FSLR) is up 811% on the year.

Q4 S&P 500 Earnings Growth Now at -6.3%

Below we highlight estimates for quarterly S&P 500 earnings growth for Q4 '07, Q1 '08 and Q2 '08. The estimates are weekly since early August, and as shown by the chart, Q4 '07 earnings estimates have fallen off a cliff. Back in August, Q4 growth was expected to be 12.3%. It is currently expected to decline by 6.3%. This decline is primarily due to the collapse of earnings in the Financial sector. Q4 '08 estimates for Financials are now expected to decline 57%. All other sectors are actually expected to be flat or show significant gains.

Final '08 Strategist Forecasts Of The Year

Credit Suisse included their 2008 S&P 500 forecast in this week's strategist survey done by Bloomberg. The company is looking for a year-end S&P 500 price level of 1,650. This is the last survey of the year, and all 12 strategists are looking for gains from current levels in 2008. Bear Stearns and HSBC are looking for the biggest gains, each with price targets of 1,700. Morgan Stanley is looking for the smallest gains, with a price target of 1,525. Morgan Stanley currently has the best call of all the 2007 estimates made at the end of '06.


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