Major indices at their highs for the day. Helping today:
B) Bush/Congress tackles mortgage issues.
C) SIVs less a problem?
Hurting the market: a few negative comments on December retail sales from Nordstrom , JC Penney and a few others
Byron Wien of Pequot Capital has released his December commentary to his clients, and I have a copy. His bottom line: "It is sensible to be reasonably defensive, but I still believe we will see a stronger equity market through year-end."
Why? Here's a summary, taken directly from his report:
--The U.S. stock market represents good value. Assuming S&P 500 earnings don't collapse next year, the index is selling at less than 16 times 2008 earnings which is quite an attractive level with the 10-year Treasury at about 4 percent.
--The low level of the dollar should help our exports and provide a much needed stimulus to the manufacturing sector.
--With the exception of housing and construction, the U.S. economy seems to be holding up relatively well.
--Business in Europe, the Middle East and Asia has only been mildly affected by the adverse conditions in the United States.
--Some slowdown in China is probably a blessing in advance of the Olympics, because it will allay fears of a bubble forming there.
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