Equity Valuations, Then and Now with FDIC data next week

8/14/2019 Equity Valuations, Then and Now with FDIC data next week

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Richard Suttmeier is the Chief Market Strategist at www.ValuEngine.com.ValuEngine is a fundamentally-based quant research firm in Princeton, NJ. ValuEngine

covers over 5,000 stocks every day.

A variety of newsletters and portfolios containing Suttmeier's detailed research, stock picks,and commentary can be found HERE.

Suttmeier's ForexTV Main Street vs Wall Street can be watched on the web HERE.

Februar y 17, 2010 Equity Valuations, Then and Now with FDIC data next week

Pivots are balancing the dollar carry trade for US Treasury yields, gold, crude oil, and dollar,

and the Dow Industrial Average. Equity Valuations on March 6, 2009 and Today! Three measuresof stress in the banking system I will be measuring next Tuesday, February 23rd.

The yield on the 10-Year Note is neutral on its weekly chart with my semiannual pivot as a magnet at3.675. This yield is the line in the sand between risk aversion and Treasury supply / inflationexpectations. My weekly support is 3.845 with my monthly resistance at 3.504.

Comex gold is neutral on its weekly chart with my annual pivot at $1115.2 as a magnet. The reversal-oriented pattern is influenced by monthly and quarterly pivots at $1093.5 and $1084.9. My semiannualresistances are $1139.7 and $1186.5.

Nymex crude oil is neutral on its weekly chart with quarterly support at $67.22, the 200-week simple

moving average at $76.20, my annual pivot at $77.05 and monthly resistance at $79.90.

Chart Courtesy of Thomson / Reuters


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The Euro is negative but oversold on its weekly chart with my weekly pivot at 1.3749 and the 200-weeksimple moving average at 1.3879.


All major equity averages have positive daily charts but with the zone of 21-day and 50-day simplemoving averages as pivots or resistances. For the Dow the 21-day is 10,219 with the 50-day at 10,377.



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All major equity averages straddle weekly pivots at 10,255 Dow, 1098.8 SPX, 2237 NASDAQ, 3927Dow Transports, 628.44 on Russell 2000, and 336.19 on the Philadelphia Semiconductor Index (SOX).

The weekly chart for the Dow is neutral above 10,221 with my annual pivot at 10,379. My weeklypivot is a magnet for the remainder of the week at 10,255. A close in February below 10,067 keeps themonthly key reversal in play.

Valuations on March 6, 2009 versus today, February 17, 2010

There are three major inputs to the ValuEngine Valuation Model Twelve month trailing EPS, Twelvemonth forward EPS estimates from Wall Street, and the yield on the 30-Year Bond.

Back on March 6th when I predicted a 40% to 50% bear market rally all eleven sectors weresignificantly undervalued 32% fir Consumer Durables to 42.2% for Energy.

Today six of eleven sectors are overvalued. Health Care is the cheapest sector at just 6.5%

undervalued. Energy, which was the cheapest in March, is the most expensive today at 10.7%overvalued.


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Three Measures of Stress in the Banking System will be available next Tuesday, February 23rd.

On Feb 23rd the FDIC will release its Quarterly Banking Profile for the fourth quarter of 2009. I willdissect this data to measure whether or not stress is increasing or decreasing in the banking system.

My first read is the quarter over quarter growth or deterioration in the loan types shown in this Table.Construction and Development Loans, which is a major component of Commercial Real Estatedeclined 8.1% sequentially in the third quarter in 2009. My second read is the year over year growth ofdeterioration in these assets. C&D loans were down 19.9% by this measure.

The Great Credit Crunch began at the end of 2007, so I compare asset exposures then versus now.C&D loans declined 21.7% since The Great Credit Crunch began. Note that Total Assets in the bankingsystem declined nearly $600 billion in the first three quarters of 2009.

I will be preparing the ValuEngine Quarterly FDIC report including an updated ValuEngine List ofProblem Banks. Go to ValuEngine.com to subscribe.


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Thats todays Four in Four. Have a great day.

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Richard SuttmeierChief Market Strategistwww.ValuEngine.com(800) 381-5576

As Chief Market Strategist at ValuEngine Inc, my research is published regularly on the website www.ValuEngine.com. Ihave daily, weekly, monthly, and quarterly newsletters available that track a variety of equity and other data parameters aswell as my most up-to-date analysis of world markets. My newest products include a weekly ETF newsletter as well as theValuTrader Model Portfolio newsletter. I hope that you will go to www.ValuEngine.com and review some of the sampleissues of my research.

I Hold No Positions in the Stocks I Cover.

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Equity Valuations, Then and Now with FDIC data next week