MFS Investment Management’s Post

GOOD MORNING!!! Please take 2 mins to read this- The picture first! ... Price to earnings is always a leading indicator and earnings are lagging indicator which eventually decides the PE sustainability!!⚔️✨🔥⚔️ With the below, explanation of how things work out, not going deep but just with simple observation, we can see that 1) After the US Fed announced potential rate cuts in 2024, NIFTY IT gave a rally and so did the stocks... Eps did not grow, PE multiple expanded whereas current sector fundamentals for the IT service sector is flat... 2) Many stocks in the recent bull run, gave a 1-2x rally just on the order book and govt announcements... ( one can argue, those are critical factors but my dear friend, let that materialise and let it happen, Valuations can go upwards without any fundamental changes and can come down if fundamentals do not change! ( please read it again) 3) Many speciality chemical stocks are fitting in explanations which are given in the below paragraph. Learning is- markets are forward looking, we have to check relative performance of stock and it's sector with the underlying changes driving the stock prices. Understanding markets with observation helps you feel good and make better decisions in the next cycle.✨✨✨ Disc- Nothing discussed is any recommendation in any sort. the whole agenda was to share what i learnt and what i am reading and observing. I am not registered and by no means I intend to have any bias while writing the above. Its all about Learnings!!🌟🌟🌟🙏🙏🙏 #equityresearch #linkedingrowth #valuations #stockmarket #learningandgrowing

Watch out! September has a history of being the worst month of the year By - https://lnkd.in/gBt6vpbJ Yardeni Research analysts see a positive trajectory for the over the next couple of months despite the historical trend of September being a challenging month for stocks. The research firm anticipates that the Federal Reserve's expected monetary easing beginning with a 25 basis points cut in the federal funds

Cheap Seats Cheap Seats, the voice of reason Is this a 5% retracement from our highs or a 10% from one of my macro guys, what's hurting our markets is Japan's carry trade long stocks short the yen, they closed -5% reversing the, covering yen selling stocks. Both Growth and Value got hit 2% according to the IWF(Growth) vs IWD(Value) ETF’s, your VIX was up 39%, People need to open their economic books. In true recovery rates go higher. Truth be told, we never took our proper spanking in 09, we instead took rates down to zero and reflated the bubble. The market since the 2nd half of last year, has been up on the hope of the fed cutting rates 6-8 times this year. Powell thought this march, which he was wrong. So, you finally get inflation down to a level that Jerome and his merryman are happy with, after a tumultuous 2-year battle with inflation, why in the world would they risk stoking inflation again by cutting rates? Powell very early on said "your average household will feel pain" and they have. The markets been misconstruing his comments all along, as if the market is forcing the fed into a September cut. So, 2 weeks ago, we were taking out old highs and now a day after a fed meeting of which they did exactly what was expected, you now say the fed's late, behind the curve. The pendulum never stops in the middle. I've seen some healthy pruning in stocks but no panic. My advice for investors is have a list ready for when America goes on sale you want seasoned companies and managements, who have stood the test of time, e.g., DHR AMZN, and when America goes on sale, look to buy these if they get depressed. The problem is, many will flock to these winners, so you are away on pricing. Also, FCNTX(fidelity contra fund) a winner. So, my job will be to inform you on what action I'm seeing and what type of players. If I see panic or buying on dips by value guys, you'll get my color. To quote a 1920's economist Nathaniel Rothschild, when there is blood in the streets and you see the whites of their eyes, it’s time to pick away on the buy side. Just as when you were hearing the champagne corks or your doorman pitching you stocks it's time to sell. I don't think it's an issue at this point, but if this gets ugly, we witnessed it in March of the pandemic, where the move down was exacerbated by downside protection costing too much, it was cheaper to just vomit your longs, which added probably another 15% of downside. Also be mindful of 10b18 where most companies during the earnings season are blacked out, so you lose your corporate bid, could skew a move down when all of the HFT guys, recalibrate. So a 5% retracement from the highs, would a move to spy 500 5,100 be a more comforting number, thus being a 10% retracement from the highs. It’s often the 1st scenario, 5% vs the 10% scenario. Be careful of catching the dip, since often

The level of Market concentration is reaching historical maximums. As you can see in the chart below, using the S&P500, the weight of the top 10 stocks is going from 25% to 30%, which is the maximum over the last 75 years. When concentration is high and growing, the index performance tends to be positive and high. However, it is a cyclical phenomenon, and when the index broadens the distribution of returns, performance tends to be lower, and it’s usually triggered by the absurd valuations of the top 10 components, or an exogenous factor (or both). When that happens, the transformation from a concentrated market to a broader one tends to happen through a market correction. We’re approaching that point. Want to know more? join Fund@mental here https://lnkd.in/ewBZ9GK4 #iamfundamental #soyfundamental #wealthmanagement #familyoffice #financialadvisor #financialplanning #policymistake #ratecut #stagflation

With inflation falling and the Federal Reserve expected to cut interest rates as soon as its policy meeting later this month, the headwinds that have beset small-cap stocks for the past few years are poised to fade.  This beaten-down sector that has been outshined by their larger brethren for years is at an inflection point. Analysts and investors are increasingly optimistic about small-caps’ potential to outperform large-caps in the months ahead, driven by the likelihood that the U.S. won’t fall into a recession and that interest rates will fall. Investors have begun to buy into the small-cap case. Small-cap exchange-traded funds have taken in a net $25.1 billion for the year through Aug. 30, almost triple the $9.4 billion invested during the same period in 2023, Morningstar Direct reports.  That’s because the earnings outlook for small cap stocks in 2025 is strong and these stocks are selling at historically low valuations. Read my story in today’s Wall Street Journal to learn more about opportunities in this sector.  https://lnkd.in/e98UkgRR The Wall Street Journal #investing #stocks #ETFs #stockmarket #personalfinance

This week's Weekly Market Commentary discusses the latest analysis on the global stock market selloff, detailing the impact of recent economic data and Federal Reserve policies. Understand the factors driving market volatility and what to expect next in our comprehensive overview.

This week's Weekly Market Commentary discusses the latest analysis on the global stock market selloff, detailing the impact of recent economic data and Federal Reserve policies. Understand the factors driving market volatility and what to expect next in our comprehensive overview.

This week's Weekly Market Commentary discusses the latest analysis on the global stock market selloff, detailing the impact of recent economic data and Federal Reserve policies. Understand the factors driving market volatility and what to expect next in our comprehensive overview.

This week's Weekly Market Commentary discusses the latest analysis on the global stock market selloff, detailing the impact of recent economic data and Federal Reserve policies. Understand the factors driving market volatility and what to expect next in our comprehensive overview.

This week's Weekly Market Commentary discusses the latest analysis on the global stock market selloff, detailing the impact of recent economic data and Federal Reserve policies. Understand the factors driving market volatility and what to expect next in our comprehensive overview.