Authored by Lance Roberts via RealInvestmentAdvice.com,
As the markets push once again into record territory the question of valuations becomes ever more important. While valuations are a poor timing tool in the short term for investors, in the long run, valuation levels have everything to do with future returns.
Yesterday, Doug Kass penned an interesting note on the current market advance:
US equity futures continued their push higher into record territory overnight (ES +0.1%), and the VIX is 1.5% lower and back under 10, after yesterday's blistering surge in US stocks which jumped 1%, the most since Sept. 11, following Powell's deregulation promise, ahead of today's 2nd estimate of U.S. Q3 GDP which is expected to be revised up. U.S.
As the latest housing data shows an uptick in sales, Case-Shiller's 20-City Composite index surged 6.19% YoY in September - the fastest rate of gain since July 2014.
As Bloomberg notes, the residential real-estate market is benefiting from steady demand backed by a strong job market and low mortgage rates. The ongoing scarcity of available houses on the market, especially previously-owned dwellings, is likely to keep driving up prices.
US equity futures in the green ahead of critical Senate debate on US tax reform and a much anticipated testimony from Yellen replacement Jerome Powell for Fed’s current policy approach. European stocks advance, led by oil and gas stocks after Shell fully restored its cash dividend and unveiled a bullish outlook. Asian shares slide despite the reappearance of the Chinese "National Team" which stabilized the SHCOMP selloff in the last hour. USD recovers gradually from overnight lows against G-10, pushing GBP/USD and EUR/USD to session lows, while oil and treasuries edged lower.
The traditionally illiquid post-Thanksgiving week has started with a series of whipsaws across stocks and bonds, as European stocks turned positive after starting the day on the back foot, initially mirroring a slide in Chinese stocks and price action in U.S. equity futures as investors look to a possible - and absolutely critical - tax-plan vote in the Senate this week.