The major indices were slightly down today as investors continue to evaluate the valuations of equities. The S&P 500 is trading at 16.5x the estimated earnings, compared with a multiple of 14.8x early in February.
According to Bloomberg, the 14-day relative strength index of the gauges was 73.7 yesterday, which is higher than the 70 reading considered by some investors as a signal to sell.
ValueWalk's Raul Panganiban interviews Kirk Du Plessis, Founder and CEO of Option Alpha, and discuss Option Alpha and his general approach to investing. Q1 2021 hedge fund letters, conferences and more The following is a computer generated transcript and may contain some errors. Interview with Option Alpha's Kirk Du Plessis
The S&P 500 closed 1,951.25 points yesterday, gaining 7.5% since its low on April 11 after data showed that the U.S. economy added more jobs than expected last month. The recent decision by the European Central Bank to reduce interest rates also helped boost equities.
Today, the S&P 500 dropped 0.2%, the Dow Jones Industrial Average (DJIA) climbed by just 0.02% and the NASDAQ was up by only 0.04%
Commenting on the market trends, Rick Fier, director of equity trading at Conifer Securities LLC told Bloomberg, his feels like a quiet summer trading day where you do what you want to do early and then it’s calm the rest of the day.You’re seeing a little bit of flushing out. Strong charts are doing well and the weaker ones are lagging a little bit.”
On the other hand, Stifel Nicolaus & Co. Fund Manger,Chad Morganlander opined that it should not be surprising for anyone to see softness after a blistering recovery. He said, “This is a temporary reprieve from a market that’s being seeing highs.”
Meanwhile, Francois Savary, chief investment officer at Reyl & Cie in Genera commented, “When you look at the behavior of the market over the past 10 days, setting record after record, the bulls have clearly been in the lead.” He also expressed his perception that the “U.S. market may have gone too far too fast” even with improving economic data and according to him, he doesn’t see too much potential from here.
- Dow Jones Industrial Average (DJIA)- 16,946.09 (+0.02%)
- S&P 500- 1,950.84 (-0.02 %)
- NASDAQ- 4,338.00 (+0.04%)
- Russell 2000- 1,172.03 (-0.33%)
- EURO STOXX 50 Price EUR- 3,313.80 (+0.26%)
- FTSE 100 Index- 6,873.55 (-0.02%)
- Deutsche Borse AG German Stock Index DAX- 10,028.80 (+0.20%)
- Nikkei 225- 14,994.80 (-0.85%)
- Hong Kong Hang Seng Index- 23,315.74 (+0.86%)
- Shanghai Shenzhen CSI 300 Index- 2,161.27 (+1.26%)
Stocks in Focus
The stock price of eBay Inc (NASDAQ:EBAY) declined 2.68% to $48.25 per share after David Marcus, the president of its payment service, PayPal, stepped down from his position to join Facebook Inc (NASDAQ:FB) as vice president of messaging products. Shares of Facebook Inc (NASDAQ:FB) rose 4.6% to $65.77 per share today.
Shares of Electronic Arts Inc. (NASDAQ:EA) increased 2.26% to $35.70 per share after the company announced that its “Battlefield” game will be available in North America in October. Starting today, customers will be able to pre-order the game from GameStop Corp. (NYSE:GME). The stock price of GameStop jumped 2.11% to $37.29 after the announcement.
The stock price of RadioShack Corporation (NYSE:RSH) declined more than 10% to $1.38 per share after the beleaguered electronic retailer posted $0.98 loss per share and $767 million in net sales for the first quarter of its fiscal 2015. The company explained that its disappointing financial performance was caused by declining in-store traffic and aggressive price competition for mobile devices.