Overseas investors have yet to sour towards U.S. assets despite high government debt levels, according the latest figures on capital flows.
from Mike Dolan:
Just one look at the whoosh higher in global markets in January and you'd be forgiven smug faith in the hoary old market adage of "Don't fight the Fed" -- or to update the phrase less pithily for the modern, globalised marketplace: "Don't fight the world's central banks". (or "Don't Battle the Banks", maybe?)
Singing the blues over your stock holdings? Tired of seeing your portfolio take a beating when company earnings come up short of analysts’ expectations? Societe Generale strategist James Montier has the perfect theme song for you: Pink Floyd’s Comfortably Numb. Just when it seemed like the world’s central bankers were finally getting somewhere with their trillions of dollars in lending facilities and coordinated rate cuts, earnings season hits in full force and things like dreary. Weak profit forecasts from the likes of Texas Instruments and DuPont served as another reminder on Tuesday that corporate profits will likely suffer no matter how much money Fed Chairman Ben Bernanke and friends throw at the financial sector problems.Montier thinks stock analysts are still wildly optimistic about earnings prospects in the midst of what could be a global recession. “Hello. Is there anybody in there?,” he writes in a note to clients channeling Pink Floyd. “This (song) gets my vote for analyst anthem of the year. Pretty much everyone is bracing for a recession, but analysts appear to be still predicting double-digit growth. Wake up and smell the coffee guys.”Montier sees this is a “clear and present danger to investors” because expectations are key to how investors judge a company’s performance.”Everyone says that no one listens to analysts, but when the stock misses expectations, it still craters,” he says.Something to keep in mind as Wall Street works through one of the busiest weeks of the earnings season.