Share Quotes

What returns can we expect from the stock market?
As of today, the Total Market Index is at $ 12133 billion, which is about 83.9% of the last reported GDP. The US stock market is positioned for an average annualized return of 3.4%, estimated from the historical valuations of the stock market. This includes the returns from the dividends, currently yielding at 0%.

As pointed by Warren Buffett, the percentage of total market cap (TMC) relative to the US GNP is “probably the best single measure of where valuations stand at any given moment.”

Over the long term, the returns from stock market are determined by these factors:

1. Interest rate

Total Market Cap and US GDP

Interest rates “act on financial valuations the way gravity acts on matter: The higher the rate, the greater the downward pull. That’s because the rates of return that investors need from any kind of investment are directly tied to the risk-free rate that they can earn from government securities. So if the government rate rises, the prices of all other investments must adjust downward, to a level that brings their expected rates of return into line. Conversely, if government interest rates fall, the move pushes the prices of all other investments upward.”—Warren Buffett

By Keiko Ujikane March 24 (Bloomberg) — Japan’s exports climbed at the fastest pace in 30 years in February as global trade recovered from the worst postwar recession, increasing prospects for a sustained economic rebound in the nation.

Shipments abroad increased 45.3 percent from a year earlier, helping the trade surplus expand the most since 1982, the Finance Ministry said today in Tokyo. At 5.1 trillion yen ($57 billion), the value of exports remains about a third lower than the March 2008 peak of 7.7 trillion yen.

Demand for Japanese goods rose to all regions for the first time since August 2007, the report showed, fueling sales for companies from Komatsu Ltd. to Mitsubishi Electric Corp. The trade revival has spurred factory production for 11 months, gains that economist Akiyoshi Takumori expects will continue.

“Before, exports were rising mostly because of Asia, but now the U.S. economy is rebounding, too. That’s definitely a good sign,” said Takumori, chief economist at Sumitomo Mitsui Asset Management Co. in Tokyo. “It’s very unlikely that Japan’s recovery will falter this year.”

By Mary Jane Credeur and Brendan A. McGrail

March 22 (Bloomberg) — JetBlue Airways Corp., the biggest carrier at New York’s Kennedy Airport, said it will keep its headquarters in the city, rejecting a move to Orlando, Florida.
Employees from the corporate offices in New York’s Forest Hills neighborhood and Darien, Connecticut, will be combined at one new location in Long Island City, Queens, JetBlue said today in a statement.

The decision caps more than a yearlong review of possible new homes and ensures that New York, the largest U.S. aviation market, retains the headquarters of the seventh-biggest domestic airline. JetBlue is the only carrier among the top 10 by traffic that is based in the northeastern U.S.

“After an exhaustive study to determine the best location for our corporate offices, we have decided that remaining in our hometown of New York makes the most sense,” Chief Executive Officer Dave Barger said in the statement.
–With assistance from Mary Schlangenstein in Dallas and Henry Goldman and David Levitt in New York. Editors: Ed Dufner, Steve Walsh

To contact the reporters on this story: Mary Jane Credeur in Atlanta at mcredeur@bloomberg.net; Brendan A. McGrail in New York at bmcgrail@bloomberg.net.
To contact the editor responsible for this story: Jamie Butters at jbutters@bloomberg.net

* FTSEurofirst 300 ends flat

STOCKS

* Banks recoup some earlier losses; Greece concerns ease
* Drugmakers benefit from clarity over U.S. healthcare bill

By Harpreet Bhal

LONDON, March 22 (Reuters) – European shares closed flat on Monday, with banks paring some earlier losses as worries over Greece eased, while drugmakers largely gained after the United States passed a healthcare bill which provided clarity for the sector.

The FTSEurofirst 300 .FTEU3 index of top European shares closed flat at 1,065.16 points after having traded as low as 1,052.04 points.

Banks were among the biggest fallers, but shaved losses from earlier in the session. Some uncertainty over European Union aid for debt-stricken Greece weighed on sentiment but analysts said most of the concerns had largely been factored into the market.

Barclays (BARC.L), HSBC (HSBA.L), BNP Paribas (BNPP.PA) and Deutsche Bank (DBKGn.DE) were down between 0.2 and 1.1 percent, while Greek banks .FTATBNK slid 2.1 percent.

At the weekend, European leaders sent out conflicting signals over aid to Greece, with Germany’s Angela Merkel urging Athens to solve its debt problems alone and Italy’s Silvio Berlusconi strongly backing European Union support.

Tim Paradis and Ieva M. Augstums, AP Business Writers, On

Friday March 12, 2010, 10:35 am
NEW YORK (AP) — Stocks traded in a tight range Friday after mixed reports on retail sales and business inventories gave investors little new insight into the economy.

Stocks had been higher at the start of trading Friday after a surprising increase in February retail sales. But investors were displeased with the Commerce Department’s report that inventories were unchanged, since economists had forecast an increase. Economists are hoping that businesses will restock store shelves on a sustained basis and give the economy a lift.

The Commerce Department said retail sales rose 0.3 percent last month. Analysts had expected sales to drop.

In midmorning trading, the Dow Jones industrial average rose 3.33, or less than 0.1 percent, to 10,615.17. The broader Standard & Poor’s 500 index fell 2.56, or 0.2 percent, to 1,147.68, and the Nasdaq composite index fell 8.75, or 0.4 percent, to 2,359.71.

Bond prices were mixed. The yield on the benchmark 10-year Treasury note, which moves opposite its price, was unchanged at 3.73 percent.

Crude oil rose 1 cent to $82.12 per barrel on the New York Mercantile Exchange.

By Mark Hulbert, MarketWatch

ANNANDALE, Va. (MarketWatch) — It’s now official.

January was a down month for the stock market, thereby triggering a sell signal from the venerable January Barometer — which holds that the market’s direction for the rest of the year will be the same as it was during January.

Does that mean you should give up on making any money in the stock market during February and simply go to cash?

Not necessarily.

A group of market-beating stock market timers I track are mostly bullish about the stock market’s prospects. By no means are they giving up on the stock market.

To construct this group of top market timers, I required them to jump over three hurdles. It would have been noteworthy enough to have cleared any one of these hurdles. But jumping over all three is an impressive achievement, which is why it behooves us to pay attention to the market forecasts of those who were able to do so.

The three hurdles were:

• Market timing performance ahead of a buy-and-hold on a risk-adjusted basis during the 2002-2007 bull market