Much of the media attention surrounding the debate going on in Washington is about the issue of increasing the debt ceiling. If one reads Standard & Poor's recent report that placed U.S. government debt on "Negative Credit Watch", the primary issue cited in S&P's report was not simply an increase in the debt ceiling. A bigger issue cited in the report was Washington's lack of any credible plan on reducing the actual level of debt. In Standard & Poor’s Negative Credit Watch report S&P concluded,“...  Read more...

By clicking the below graphic, readers can access estimated earnings growth rates for the S&P and its sectors through 2012. Beginning in Q4 2011, financials are expected to show the strongest growth in earnings. Only time will tell.From The Blog of HORAN Capital Advisors  Read more...

Emerging market economies are at risk of overheating; however, many emerging countries are working to stem growth in an effort to prevent a hard landing of their economic growth. The countries at highest risk of overheating are detailed in the below table.From The Blog of HORAN Capital AdvisorsThe factors that make up the overheating index are displayed in the below interactive table.Source:American ExceptionalismThe EconomistBy: R.A.July 1, 2011http://www.economist.com/blogs/freeexchange/2011/0...  Read more...

Stock buybacks and dividend increases for companies in the S&P 500 Index have certainly been on the mend since the end of the financial crisis in 2009. For the first quarter, and on a year over year basis, dividends are 13.7% higher, buybacks are 62.7% higher and buybacks plus dividends are higher by 39.6%.From The Blog of HORAN Capital AdvisorsData Source: S&P (PDF) In addition to the improvement in buyback and dividend payments, company cash balances now exceed a record $1 trillion, a 14.6% in...  Read more...

In our post in mid June titled, Market Adjusting To Slower Growth Economic Environment, we noted the put/call ratio had climbed to 1.1 and was at a level last reached at the market's low in March 2009. At the time of our post, the S&P 500 Index was trading at 1,271. Since that time the put/call ratio has declined to .56 and the S&P has rallied to 1,339, an advance of 5.3%.From The Blog of HORAN Capital AdvisorsThe ability of the market to move higher in the coming week's may hinge on the market'...  Read more...

Consulo Mack interviews Michael Mauboussin in this week's WealthTrack video. Mauboussin is Chief Investment Strategist at Legg Mason Capital. In this interview, Mauboussin discusses why investors tend to buy high and sell low and why higher trading activity often leads to lower returns. Mauboussin is one of the leading experts on the behavioral tendencies that impact investor returns. Mauboussin believes the economy is in the earlier stages of a recovery and favors large cap equities at this poi...  Read more...

Since January 1, 2000 small cap and mid cap stocks have significantly outperformed large cap U.S. equities.From The Blog of HORAN Capital AdvisorsFrom a valuation perspective, since the beginning of 1992, mid cap equities are trading at historically high valuations compared to large cap stocks on a relative basis. Absolute valuations of mid cap stocks still look reasonable; however, if there is a reversion to the mean, large cap equities are likely to gain the upper hand on performance as one lo...  Read more...

Market volatility of late seems to be the norm due to concerns over European debt defaults, budget deficits and slow worldwide growth expectations. These issues are being somewhat offset by the large amount of liquidity that resides on corporate and individual balance sheets. This liquidity is seeking a home that offers better returns than U.S. Treasuries. The 5-year Treasury is yielding around 1.53% and the 10-year treasury is under 3%, trading at a yield of around 2.95%.Our positioning of our ...  Read more...

This morning the American Association of Individual Investors reported a decline in individual investor bullish sentiment 24.42% versus last week's reading of 30.18%. The bearish sentiment level jumped over 14% to 47.67% versus last week's bearishness level of 33.43%. This resulted in a bull/bear spread of -23.3% versus last week's -3.3%. Lastly, the 8-period moving average of the bullish sentiment reading is approaching levels reached in March 2009, a market turning point.From The Blog of HORAN...  Read more...

The S&P 500 Index has generated a negative return in each of the last five weeks and has started the sixth week on a down note. From a technical perspective the market appears oversold.The percentage of stocks selling above their 50 day moving average has fallen to levels last seen during the March lows earlier this year. After the close today only 24% of S&P 500 stocks are trading above their 50 day moving average compared to 27% in March. Additionally, the percentage of stocks trading above th...  Read more...