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U.S Stocks Dominate Global Equities Most Since 2004

*from www.bloomberg.com, April 22, 2013 (To view original article click here.)

Take Away #1: The combination of this month’s retreat in global equities and gains by U.S. consumer stocks has made American companies the five biggest in the world for the first time in eight years.

Key Facts and Figures:

  • Exxon Mobil Corp. (XOM), Apple Inc. (AAPL), Google Inc. (GOOG), Berkshire Hathaway Inc. and Wal-Mart Stores Inc. are now the largest by market value.
  • PetroChina Co., one of three Chinese stocks in the top five last year, slipped to No. 6.
  • Two companies that relied on banking profits, Citigroup Inc. and General Electric Co., fell out since American firms last held the leading spots at the end of 2004.

Take Away #2: The shift in rankings, a barometer of investor expectations for profits and economic growth, shows increasing confidence in Federal Reserve Chairman Ben S. Bernanke’s $2.3 trillion of stimulus spending.

Key Facts and Figures:

  • Gains in retailers, computer-driven device makers, and media companies have preceded increases in GDP in the past as markets anticipated improving customer demand.
  • “U.S. authorities have done an incredible job of maintaining the recovery and encouraging the consumer,” said Henk Potts of Barclays Wealth in London.
  • His team ranks U.S. shares as their top asset for 2013.

Take Away #3: The S&P 500 Index fell 2.1% to 1,555.25 last week.

Key Facts and Figures:

  • Last week’s fall is the biggest loss in the S&P 500 in five months.
  • Concern the Fed will end its stimulus through bond buying sent copper into a bear market and oil down 3.6%.
  • Of the 103 companies in the S&P 500 that posted earnings this month, 51% trailed analyst sales forecasts, the most since 2009.
  • Since 2010, the stock market’s biggest retreats have started this time of year.
  • The S&P 500 fell 9.9% between April 2 and June 1 in 2012, and 19% from April through October 2011.
  • The benchmark gauge climbed 0.1% to 1,556.58 at 9:38 a.m. New York time today.
  • Stocks with profits tied to American consumers have led a 130% advance in the S&P 500 since March 2009, after trailing the index in the last bull market.
  • Wal-Mart, the world’s biggest retailer, jumped 15% this year.
  • Berkshire Hathaway (BRK/A), the largest investor in Coca-Cola Co., is up 17%.

Take Away #4: The rise of U.S. companies in world rankings comes as the largest stocks in the world shrink.

Key Facts and Figures:

  • The average market value of the 10 biggest was $273 billion this week, a 9.2% decline from the end of the third quarter.
  • This even as the S&P 500 rose 5.8% in the period and the MSCI All-Country World Index of developed and emerging economies advanced 6.2%.
  • No company is worth more than $400 billion for the first time since 2011.
  • The balancing shows the breadth of the global rally.
  • The advance since 2009 has been spread evenly among the S&P 500’s constituents.
  • Unlike in the 1990s, when gains were concentrated in the largest companies.
  • A gauge that strips out the market bias in calculating the S&P 500’s return is up 190% since March 2009, or 1.5 times as much as the market-weighted gauge.

Take Away #5: Economic reports this month slowed the rally in the S&P 500.

Key Facts and Figures:

  • The S&P 500 fell 0.4% on April 5 after the Labor Dept. said employers added the fewest workers in nine months.
  • It fell 0.3% a week later, when March retail sales unexpectedly fell, according to the Commerce Dept.
  • In the days between the reports, shares gained 2.6%.

Take Away #6: U.S. companies got bigger as Chinese stocks shrunk.

Key Facts and Figures:

  • Losses averaged 9% this year in three equities that occupied the top five as recently as September.
  • Those three are Beijing based PetroChina, Industrial & Commercial Bank of China Ltd., and China Mobile Ltd.
  • Economic expansion growth in China unexpectedly lost momentum last quarter as gains in factory output and consumption weakened.
  • GDP rose 7.7%, less than the 8% median of economists’ forecasts.
  • Hong Kong’s Hang Seng Index lost 7.6% since Jan. 30, while the Shanghai Stock Exchange Composite Index fell to an almost four-year low in December.
  • China’s economy has failed to live up to the expectations priced into its stock market, while our economy has generally exceeded very low expectations.
  • The U.S. is “the better risk/reward option,” said Howard Ward of Gamco Investors Inc.

Take Away #7:. Concern that the slowdown will hurt global growth just as the Fed debates ending the bond-buying known as quantitative easing has sent the S&P 500 down 2.4% since reaching a record on April 11.

Key Facts and Figures:

  • U.S. profit growth slowed last year to a quarterly average of 4.7%, less than one-fifth the rate during 2010 and 2011.
  • “We need global GDP growth, we can’t do it in the U.S. alone,” Barry Bannister of Stifel Nicolaus & Co. said.
  • The International Monetary Fund cut its 2013 world growth projection the last four quarters to 3.3%.
  • That compares with 4.8% for 2012 and 5.7% for 2011, IMF data compiled by Bloomberg show.

Key Facts and Figures:

Take Away #8: The U.S. took over the biggest-companies ranking this month when Wal-Mart’s 4.6% gain sent its market value to $258 billion, passing PetroChina.

Key Facts and Figures:

  • Shares of the store chain have risen 6 percentage points more than the S&P 500 in 2013, reaching a record high last week.
  • The retailer may say in May that first-quarter earnings rose 5%, according to analyst estimates.
  • Berkshire Hathaway, the Omaha, Nebraska based holding company run by billionaire Warren Buffett, climbed 17% this year to become the world’s fourth largest at $259 billion.
  • Apple became the world’s most valuable company in January 2012, a spot it held for 12 months as consumer demand for iPhones and iPods helped more than double profits on record revenue.
  • At its largest, Apple Inc. was worth $658 billion, exceeding its closest peer by about $240 billion.
  • The 44% drop since then left it at $374 billion, No. 2 on the list.
  • Google increased 13% since the end of 2012 and its market capitalization reached a record $278 billion in March.
  • Google is up 4.4% since it reported profits last week that topped analyst projections as advertisers boosted spending on mobile and video promotions.

Take Away #9: Gains in consumer stocks have preceded above-average economic growth in past bull markets.

Key Facts and Figures:

  • Following quarters in which they rallied the most or second-most in the S&P 500, GDP expanded 3.1%, compared with the historic average of 2.9%.
  • Consumer companies are beating analyst earnings estimates by 4.3% so far this season, about 0.5 percentage points more than the rate for the S&P 500.
  • Of the 15 companies that have reported, 11 have exceeded analyst estimates.
  • Lennar Corp. (LEN), the third-largest U.S. homebuilder, hit an almost six-year high in March after posting better-than-estimated profit and a 34% jump in orders.
  • Mattel Inc. (MAT) last week climbed the most in three months after the world’s largest toymaker said profit and revenue beat estimates.

Take Away #10: Out of the world’s top 50 companies by market value, 26 are now American.

Key Facts and Figures:

  • That’s on track for the highest annual total since 2005.
  • The number fell to 21 at the end of 2007, form as high as 35 in 2001, as losses in so-called subprime debt roiled financial firms and pushed the U.S. into a recession.
  • “The U.S. looks like a bright spot within the developed world,” said Tristan Hanson, head of asset allocation at Ashburton Ltd. in London.
  • “The housing market is recovering, credit is recovering, the labor market is recovering. You may be a bit frustrated with the pace, but there is recovery there.”

*To view original article from www.bloomberg.com click here.

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