Valuations Are Still Attractive Even As The Market Melts Up
S&P 500’s P/E Ratio Is Still Below Prior Major Market Tops:


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Peter Munk, chairman and founder of Barrick Gold, shares his outlook on the commodity.

Sovereign debt woes continue to be the bane of this rally. At the end of April the S&P Rating Agency downgraded Greece’s debt to “junk” status, which accelerated the steep sell-off in the euro and sent it down to its 2008 lows! This sparked a world-wide panic sell-off which sent stocks plunging. In addition, Spain and Portugal’s debt was also downgraded which put pressure on a host of capital markets. Italy and Iceland are the two nations which analysts believe are also dealing with ominous debt levels. All of this helped the US dollar enjoy one of its strongest gains against the euro in over a year. Since November, the greenback has rallied smartly and jumped above its 50-day moving average (DMA) and 200 DMA lines. As expected, the stronger dollar sent US stocks and a slew of commodities (i.e. dollar denominated assets) lower as investors continue to debate our economic future.

Coming Up Next Week: MONDAY: Labor Day—U.S. markets closed TUESDAY: PMI manufacturing index, ISM mfg index, construction spending, Fed’s Williams speaks, Kodak emerges from bankruptcy; Earnings from H&R Block WEDNESDAY: Mortgage applications, international trade, quarterly services survey, Beige Book, Fed’s Kocherlakota speaks, auto sales, Neiman Marcus bids due, Samsung event; Earnings from Dollar General THURSDAY:…

On Friday stocks sold off as investors unloaded their positions ahead of the the weekend. The catalyst which precipitated this sell off was Dubai World’s trouble restructuring their debt. Dubai World, the most indebted of Dubai’s state-sponsored companies, is seen as a barometer for the health of the financial nexus.

Why The Fed Didn’t Taper: 9/22/2013 Two reasons: Fits their Agenda, and a Simple Cost/Benefit Analysis. Bernanke’s worst case scenario for continuing QE is hyper inflation, which is currently a nonevent. Meanwhile, the upside of continuing QE: Help the Economy, Create Jobs, and Raise Asset Prices. Since the worst possible scenario is hyperinflation (and we are no where near…