Month: January 2012

What’s the next big thing in consumer electronics?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Pretty much every year, a big trend emerges from the Consumer Electronics Show. And pretty much every year, it`s heralded – at least for a short while – as the next big thing in consumer electronics.

This year, it`s shaping up to be Ultrabooks. The problem is: In many ways, the “next big thing” of the last few years hasn`t really been all that big.

The buzz at CES was 3D TV two years ago, but that`s still struggling to find an audience. Tablet computers were deemed the “it” last year, but beyond Amazon`s Kindle and Barnes and Noble`s Nook (which were both out long before CES), eReaders quickly died out. And Apple`s iPad (which wasn`t a part of CES) has greatly overshadowed most of its competition.

Will Ultrabooks underwhelm this year? It`s too early to say, but some analysts think it`s going to be a while before we see a new technology or advancement that lives up to the hype.

“I`m not sure if I expect to see a wholly new product emerge this year,” says Ben Arnold, director of industry analysis for consumer tech at NPD. “Reading the tea leaves, I feel like a lot of the focus will be on improving the stuff that`s already out there.”

Some analysts, in fact, question whether there will even be a next big thing – ever. The move to a more multifunctional mobile world is consolidating electronics – and that erects more hurdles for technologies hoping to open up new spaces.

“What I really think is the biggest trend in consumer electronics kind of argues that there won`t be a next big thing,” says Jordan Selburn, principal analyst for consumer platforms for IHS iSuppli. “What`s taking over the consumer market is the end of the single tasker – the end of the device that does just one thing. … We`re entering an area where software is the thing. You`ve got three or four general purpose platforms that can do anything, and they do.”

If Selburn and Arnold are right, the evolution of existing electronics will be critical – and will drive replacement cycles forward. The television industry continues to push 3D hard, but until there`s a critical mass of programming that can be watched without glasses, there`s not likely to be much consumer interest.

While 3D technology is certain to be a feature of most sets, the concept of the Internet-enabled TV actually holds more promise. The “connected home” has been a buzzword for years now – a premise in which appliances talk with each other and homeowners can easily do things like program their thermostat from remote locations.

The reality, though, has been expensive and hard to install. Advances in control techniques could be a breakthrough, however.

Apple`s Siri and Microsoft`s Kinect peripheral for the Xbox 360 are opening up new avenues to search for content and control devices, and could be installed in more electronics.

“I can definitely see that working its way into more products, and I think it`s in the works,” says Arnold. “I would expect to see some of that at this CES and definitely at the 2013 CES. … There are plenty of stories about people hacking Kinect to use with web browsers and such. That`s where the energy starts for these sorts of things.”

Much of the talk about this year`s show has centered around ultrathin laptops. Dubbed “Ultrabooks” by Intel (which is leading the charge for the systems), they measure only 3mm at their narrowest points.

Shawn DuBravac, director of research for the Consumer Electronics Associations, predicts that 30 to 50 Ultrabooks will debut at this year`s show – an impressive number for any market. Intel and PC makers hope the systems will offer a competitive alternative to Apple`s MacBook Air -and regain some marketshare from the tablet space.

Analysts aren`t convinced the laptops will succeed in that last objective.

“The vast majority of stuff that people do with their computers today is content consumption, not creation,” says Selburn. “And for content consumption, the advantages a tablet has – in terms of usability and cost – probably keep it the superior option.”

As for tablets, they will continue to evolve, say analysts – perhaps finally stepping out of the shadow of Apple. In fact, it appears that Amazon has led the way on that front, creating a device that doesn`t try to replicate the iPad, but offers a different set of features for a different audience.

“What needs to happen is these products need to find a niche or differentiate themselves,” says Arnold. “It`s hard to put out a product that`s kind of like the Apple ecosystem, but lacks the apps and costs the same amount.”

Apps seem to be driving the most innovation these days – so much so that this year`s CES has vastly expanded the amount of floor space dedicated to them. Once confined to a 4,000-foot section, the iLounge Pavilion now covers 75,000 square feet. The area was originally set to be 50,000 square feet this year, but was expanded because of demand.

“You`ve got a computer in your pocket, you`ve got a computer in your briefcase, you`ve got a computer on your desk – and pretty soon you`re going to have a computer in your TV – all running apps – and they`re going to do most of what you want to do,” says Selburn. “The problem is: How do you wrap up an app and put it under the tree at Christmas?”

Copyright 2011 cnbc.com

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

US economy in ‘mild recovery’: JPMorgan’s Dimon

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The US is in a “mild recovery” that is “broad and strengthening,” JPMorgan Chase CEO Jamie Morgan told CNBC Monday.

“When you look at all the sectors – corporate, middle market,  business, consumer – for the most part they`re better than they were a year ago, and we even think housing is near the bottom if you look at rental prices, supply and demand, household formation,” Dimon said. “So I hope we have a growing economy.”

He said banks, including JPMorgan, “have a lot of issues sitting on them right now including Europe, which may be the largest of them. We would like to see Europe solve its problems.”

He said the European Central Bank`s new three-year deposit facility “removed a lot of issues about liquidity.”

But the ECB must work with the European Union on its members` financial problems, he stressed.

“It`s fair for the ECB to say this is not our issue, it`s a government issue,” he said. But it`s also fair for the EU “to say we need the ECB to help with liquidity, particularly for Italian and Spanish sovereign debt . There are a lot of issues to work out, and they should be done together and soon, because I think the longer you wait the higher the risk is something goes wrong that you can`t control.”

That`s important to Dimon because JPMorgan has exposure to Italy and Spain and does not want to leave those markets, at least not yet.

“We`ve been doing business with Italy and Spain for 100 years. We want to be there for another 100 years,” he said.

JPMorgan bought back stock in 2011 and plans to do more of that this year, he said – but at the right price. He wouldn`t comment on any changes to the company`s dividend but said growth is expected to increase organically, such as from opening more bank branches, rather than through acquisitions.

Copyright 2011 cnbc.com

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Week Ahead: Market will be tested by earnings, Europe, Iran

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Cross currents from Europe, a gaggle of Fed speakers and the start of the corporate earnings season combine to make the coming week a critical test for markets in the new year.

The European debt crisis will be a major focus as the leaders of Germany and France meet Monday. The euro may also stay under pressure as investors watch the outcome of bond auctions in Italy and Spain and await potential credit downgrades in the euro zone.

U.S. data, in the week ahead, includes important retail sales data, weekly jobless claims and consumer sentiment. Plus, more than a half dozen Fed speeches will keep traders speculating on whether the Fed could consider more easing. The Fed meets in the following week and has already disclosed plans for a new communications strategy but is not expected to announce more quantitative easing.

The coming week is also important because it is the official launch of the fourth quarter earnings season.

“This is the first time in this recovery, we`re going to see earnings growth falling to single digits,” said Gina Martin Adams, institutional equity strategist for Wells Fargo Securities.

“I think it`s going to be a volatile season. You`ve got three sectors that are expected to produce negative earnings growth. For the first time since the recovery, we`re producing negative earnings growth. I think it will be something of a wakeup call. We`ve been lulled by persistent earnings beats over the last couple of years,” she said.

There are just two major reports in the coming week, starting with Monday`s report from Alcoa, seen as the traditional kickoff of earnings season. On Friday, J.P. Morgan reports, and the real flood of earnings reports begins the week after.

The SandP 500 is expected to generate earnings growth of 7.8 percent, according to Thomson Reuters. The three major SandP sectors that are expected to see negative earnings growth are telecom, down 18.6 percent, materials, down 8.6 percent and utilities, down 3.2 percent, according to Thomson Reuters data.

“We think we`re going to have a pretty good earnings season because expectations have been ratcheted down so far,” said Brown Brothers Harriman strategist Andrew Burkly.

“As far as companies` upside surprises, I think you`re going to get your typical 65 percent of companies surprising on the upside,” he said. That number had been more like 75 percent in recent quarters.

January Effect?

The Dow rose 1.2 percent in the past week, with most of its gains the result of a strong rally Tuesday. The Dow was at 12,359. The SandP 500 gained 1.6 percent for the week to 1277. Traders watch the first five trading days of the year to see what direction the market will go in January, and therefore the year.

Burkly said he watches the performance of the whole month of January as a guide for the year. “We had the Santa Claus rally. That`s typically a good sign for January and for the following year,” he said. Burkly expects the market to perform well in the first part of the year before facing bumps later in the year. Many analysts expect the reverse.

Adams said stocks could face difficulties in the next several weeks because of earnings and other events. “You have a lot of action with respect to the European bond market and people starting to get skittish in reaction to Europe … I think it`s going to be a tough couple of weeks. Nobody`s excited and there`s a high degree of skepticism,” she said, noting periods of heavy skepticism can also turn into positives.

Econorama

Friday`s surprisingly good jobs report follows a series of better-than-expected data, but stocks ended the day mostly lower.

Adams said the market is beginning to focus on the potential for slowing in the first quarter.

December’s chain-store sales reports from retailers were mixed Thursday, and the government`s retail-sales number for December is expected to come in up 0.2 percent when it is reported Thursday.

“I think we`re going to get a decent retail-sales number. It won`t be gangbuster but it will be solid,” said RBS senior economist Michelle Girard. Girard said the data should continue to look good for the next several weeks but she does expect slowing.

After 3.5 percent or so growth in the fourth quarter, she expects growth in 2012 to be just 2 percent. “We’ve seen these periods where the numbers are getting better but we can`t sustain them,” she said.

The jobs report Friday showed that 200,000 nonfarm payrolls were added in December and that the unemployment rate continued to slip to 8.5 percent, but Girard does not expect the recent rapid pace of decline in the unemployment rate to continue.

“It may not be the improvement you’ve seen over the last three months. It may be that you get the same improvement but it`s only over the next 11 months or 12 months,” she said. Economists expect the employment picture to improve slowly. 

What Else to Watch

Europe will stay a central focus, and the meeting between German Chancellor Angela Merkel and French President Nicolas Sarkozy should bring more headlines on the debt crisis, but also possibly on the sanctions against Iran.

European officials are discussing putting an embargo on Iranian oil, and they are expected to make a decision by the end of the month. President Obama, meanwhile, signed legislation last week that puts sanctions on the Central Bank of Iran.

Treasury Secretary Timothy Geithner travels to China and Japan this week to discuss Iran and economic issues with leaders there.

Oil has been moving higher on rising tensions. Nymex crude gained 2.8 percent in the past week, to $101.56 per barrel.

Iran, meanwhile, has said it will conduct military exercises in the Strait of Hormuz, the narrow waterway through which about a third of the world`s seaborne crude travels.

Euro Trashed

The euro temporarily fell below 1.27 Friday, for the first time since September, 2010. The euro finished the week at 1.2719, down 1.9 percent.

“I`m not expecting a great deal from that Sarkozy-Merkel summit. They`re having lunch and a briefing afterwards,” said Brian Dolan of Forex.com. “The risk is they do disappoint and Merkel comes out and repeats her opposition to greater ECB (European Central Bank) involvement.”

The ECB itself meets later in the week, when it holds a rate meeting Thursday. It is not widely expected to take action at that meeting, but it is expected to cut rates later on.

Dolan said the euro may be reacting to the inevitability of a rate cut but its decline has been rapid. “We didn`t expect this rapid a drop in the euro to start the year,” he said.

Dolan said he is also watching Chinese data, when the trade balance is reported Tuesday morning and CPI is reported Friday.

What Else to Watch

Monday

Earnings: Alcoa, Schnitzer Steel

1240 pm Atlanta Fed President Dennis Lockhart on economy

0300 pm Consumer credit (Nov)

Tuesday

Earnings: Synnex

0730 am NFIB survey (Dec)

1000 am Wholesale trade (Nov)

1030 am San Francisco Fed President John Williams on economic forecast

1000 am JOLTS (Nov)

0100 pm Treasury auctions $32 billion 3-year notes

0110 pm Kansas City Fed President Esther George on economic outlook

Wednesday

Earnings: Chevron (interim report) (NYSE: CVX), Lennar, Supervalu

0840 am Chicago Fed President Charles Evans on economy

0900 am Atlanta Fed`s Lockhart on economic outlook

1230 pm Philadelphia Fed President Charles Plosser on economic outlook

0100 pm Treasury auctions $21 billion 10-year notes

0200 pm Beige book

Thursday

Earnings: Infosys, Shaw Communications

0830 am Initial jobless claims

0830 am Retail sales (Dec)

1000 am Business inventories

0100 pm Treasury`s 30-year auction

0200 pm Federal budget

Friday

Earnings: J.P. Morgan

0830 am International trade

0830 am Import prices

0955 am Consumer sentiment

1110 am Fed Gov. Elizabeth Duke on regulations and credit availability

1245 pm Richmond Fed President Jeffrey Lacker on economic outlook

0100 pm Chicago Fed`s Evans on economic outlook

Follow Patti Domm on Twitter: @pattidomm

Disclaimer

Copyright 2011 cnbc.com

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Does Asia’s PMI data signal a rebound?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Purchasing managers indexes (PMI) for China and India released in the past week, showed that both economies experienced a rebound in the manufacturing and services sectors in December, but according to a number of analysts, it`s too premature to call a turning point for the two countries or the broader Asian region.

“It seems premature to view November as the low point,” Richard Jerram, Chief Economist, Bank of Singapore told CNBC. “The December PMI data are encouraging as they suggest that growth is not collapsing, but in both cases there is no reason to expect an immediate improvement.”

Jerram cites several macroeconomic problems that continue to plague the two Asian economic powerhouses, such as inflation and growth.

Research firm Capital Economics points out that beyond China and India, PMI data for other countries offers a much more mixed picture. Production levels have declined in Taiwan, Singapore and Korea. In the case of Korea, manufacturing activity shrunk by the most in three years.

According to the firm, although the biggest jump in PMI was recorded in India, the positive readings are marred by “a string of disappointments” in other indicators for the country such as industrial production, exports, and auto production.

Yet there are some signs of a silver lining, according to HSBC`s Co-head of Asian Economics, Frederic Neumann. He believes the data has “brightened the picture everywhere.”

In a note to clients, Neumann said November was a bleak month for Asian economies but in December, “new orders have improved again almost everywhere.” He said inventories appear to have dipped and new export orders showed signs of life as well.

Neumann admits that an improvement in the ISM alone won`t boost the region’s growth. “To turn things around, either Europe will have to wake up (unlikely) or Asia will need to turn the stimulus dial,” he said.

Copyright 2011 cnbc.com

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Emerging markets to rebound up to 30% in 2012: Strategist

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The tide appears to be turning for emerging markets (EM), after a dismal year that saw the MSCI emerging markets index fall by 20%, lagging both the European and US markets.

According to Citi`s global emerging markets equity strategist Geoffrey Dennis, the outlook for this asset class is bright, with interest rates set to head lower and the likelihood of a soft landing for China`s economy.

Dennis says the conditions that contributed to the outflow of funds from emerging markets last year have eased, and he expects a 25-30% rebound in EM stocks in 2012.

“(The) thing that really hurt emerging markets last year was a much sharper interest rate cycle and inflation cycle than any of us had anticipated in the beginning of the year and that was the big negative. And as we head into 2012, that is all over now. Interest rates are not going up any more in the emerging markets and I think that will create better conditions for the year ahead,” he told CNBC on Wednesday.

Sky-high inflation in China, which have forced authorities to tighten monetary policies for much of 2011 and taken a toll on stock markets as a result, is set to ease in 2012, says Citi. The bank expects the country`s consumer price index to fall to an average 4.1%, after hitting a summer peak of 6% in 2011.

“This sharp drop in inflation should open the way for easier monetary policy,” the bank said in a report. Citi, which is overweight in Chinese stocks, is expecting as many as eight 50-basis point cuts in the reserve requirement ratio this year, with the first coming before Chinese New Year.

Citi does not expect a hard landing for China`s economy, and predicts a fall in the country`s growth rate to 7.5-8% in the current quarter before rebounding by the end of the year. “Full year growth (is) probably going to be around the 8.5 percent level, and that is consistent with a soft landing,” Dennis said.

Citi is also bullish on South Korea, where central bankers are also expected ease monetary policy in 2012. The Bank of Korea (BOK) has kept rates steady since it last hiked rates by 25 basis points in June last year.

“The BOK probably begins to cut interest rates sometime in the first half of 2012,” Dennis said.

“We have overweights right now in Korea, in China.. so we`re playing the value story particularly in Korea and China in the sense that markets are very cheap there and we do expect the economic numbers to begin to bottom out.”

Also expected to support stocks is the stabilization of emerging market currencies, which have been battered late last year against the U.S. dollar.

“We think the dollar is going to be more of a neutral factor for emerging markets this year, what that means in practice is that these currencies which have come under some pressure towards the end of last year began to stabilize, and that of course will be very important for getting money coming back to the emerging markets,” Dennis pointed out.

Still, the outlook for EM will hinge on the global economic environment, particularly Europe, which Citi isn`t expecting a worst-case scenario.

“We don`t expect the global economy to blow up here and go back into the sort of conditions we had in 2009. We don`t expect there to be a cathartic break up of the euro in 2012. (But) both of those are very important assumptions,” he said.

Copyright 2011 cnbc.com

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Predictions: Greece, Italy will default; S&P will top 1400

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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What kind of surprises are in store for 2012?

If Byron Wien, vice chairman of Blackstone Advisory Partners, is correct: Italy and Greece will default on their debt but will remain in the European Union. The Standard and Poor’s 500 will get above 1,400. Unemployment will fall below 8% and GDP growth will top 3%. Mitt Romney will be the GOP nominee for president. He will be defeated by President Obama – providing those predictions on unemployment and GDP come true.

These are some of the items on Byron Wien`s annual list of “surprises.”

Wien told CNBC Wednesday he remains optimistic about a rising stock market in 2012, an improving US economy and a Europe that manages to come up with a long-lasting plan to solve its financial problems.

“Europe has much too much to lose if the European Union dissolves,” Wien said. That`s why he thinks Greece and Italy will stay in the EU even though he expects a Greek default and the “strong possibility” of an Italian default on its debt .

Wien sees oil falling to USD 85 a barrel as more oil is extracted from shale and rock. “Extraction from resources in the US is going to be a game changer,” he said. He is also still bullish on gold, saying it will go for USD 1,800 a troy ounce.

He told CNBC his own investments include US equities, large-cap multinationals, energy, some pharmaceuticals and technology. He named no specific companies.

Wien did pretty well last year, getting eight of his 10 predictions right – his misses involved stocks and bonds: He predicted the SandP would end the year at 1500 and the yield on the 10-year Treasury bond would close out 2011 at 5%.

Wien, the former chief US investment strategist for Morgan Stanley, isn`t the first to think the economy will be a big factor in whether President Obama is re-elected. With the exception of President Obama, he sees an “anti-incumbent” wave at the polls, which would put the Democrats in charge of the House of Representatives and the Republicans in control of the Senate – a 180-degree change from the current Congress.

Even more surprising, he sees the Congress cutting USD 1.2 trillion from the federal deficit over 10 years. “I don`t think we can wait until the end of the year” to cut the deficit, Wien said. “Right now nobody thinks anything will happen before the election. There`s too much that has to happen between the election and Jan. 1” including defense and health-care funding and deciding whether to let the Bush tax cuts expire.

Among his other predictions, Wien also thinks investors will go long on currencies of “prudent countries” such as Norway, Singapore and Australia.

Copyright 2011 cnbc.com

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

China likely to cut bank reserve ratios soon: Analysts

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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China`s central bank is likely to announce further cuts to banks` reserve requirement ratios to boost slowing growth, a number of analysts told CNBC on Wednesday, a day after the country`s premier warned of a “difficult” period ahead for the economy.

In comments published on Tuesday, Wen Jiabao also said the government would fine-tune monetary policy to deal with a slowdown in 2012.

Three of the four analysts CNBC spoke to, believe the central bank could slash the reserve requirement ratio (RRR) by up to 50 basis points before the Chinese New Year holiday, which falls on January 24^th and 25th. One of the analysts said a RRR cut could come as early as this week.

“It is likely they will allow the liquidity in the system to rise going into the Chinese New Year to facilitate… and encourage a general feeling of well being,” Andrew Sullivan, Principal Sales Trader at financial services firm Piper Jaffray Asia Securities told CNBC on Wednesday.

The reserve ratio is the percentage of bank deposits, which need to be parked with the central bank. China last cut its RRR for banks by 50 basis points on November 30^th, reducing the ratio to 21% for large banks. Analysts said that helped free up USD 61 billion in funds for banks to lend.

In addition to monetary easing, Eddie Tam, CIO at the hedge fund manager Central Asset Investments said the government was likely to provide further stimulus measures in the form of tax cuts for small and medium sized enterprises (SMEs) and incentives to boost consumer spending.

Piper Jaffray`s Sullivan also expects measures to boost consumer spending, but he says the government will try and make sure the money doesn`t find its way to the property sector, which it has been trying to cool.

A cut in the RRR will boost market sentiment, Dickie Wong, Executive Director at Kingston Securities told CNBC. As a result, he recommends investors increase exposure to the country`s retail sector.

He said he was bullish on jewelry retailers including Chow Tai Fook, Chow Sang Sang and Emperor Watch and Jewellery as well as luxury brands such as Prada, and BMW`s Chinese partner Brilliance Automotive.

Copyright 2011 cnbc.com

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Why is Wall Street so bullish after such a weak year?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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After a year in which the Standard and Poor’s 500 finished almost exactly flat for the year and with a slew of headwinds lurking, stock market strategists could be excused for sounding a bit pessimistic for the year ahead.

No worries, though: Wall Street is just as optimistic as ever that it can somehow fight its way out of its year-long (indeed, decade-long) doldrums and pull off a big gain in the next 12 months.

A pair of press briefings Wednesday showed vividly that market pros continue to favor the sunny side of the Street.

Take, for instance, Binky Chadha, chief US equity strategist at Deutsche Bank.

Chadha is fresh off making what TheStreet.com recently dubbed the “biggest S&P 500 blown call of 2011”-an audacious and stunningly wrong prediction last year that the index would finish the year at an eye-popping 1550.

So he missed by nearly 25%? So what?

There was Chadha, telling reporters that the S&P 500 would finish this year at a somewhat subdued 1500-about 18% from the current trading level and nearing bull market territory.

Trust him, he has his reasons.

“The theme basically is equities are very cheap. We would argue that there is also a lot of risk,” Chadha said. “The question is, how do you play the value versus the risk?”

The answer, he suggested, was easy: Buy, buy, buy, despite what all the naysayers profess. He broke his beliefs down into seven themes:

1) Worried about the future? Don’t be sucked in by the “extreme negativity” which is at levels seen only three times in history.

2) MandA is on the way (we’ll give him this one).

3) Dividends are rising, so why not buy?

4) Stock buybacks are rising (hmmm…not really…they actually fell by USD 218 million in December).

5) the US is not (bank on it) going into recession.

6) Europe isn`t really as bad as it looks.

7) the US presidential election will be good for stocks since the Republicans likely will take full control of Congress and, after all, it doesn`t really matter to Wall Street who is president.

Chadha’s predictions were backed up in full throat by Deutsche’s chief economist, Joe LaVorgna, who sees US gross domestic product gaining 4.3% in the fourth quarter of 2011 and unemployment falling below 8% in 2012.

“The consumer’s got more sustainability than people believe,” LaVorgna said.

Uptown a ways, strategists at Prudential Financial gathered to deliver a bullish but decidedly more subdued forecast.

Ed Keon, Prudential’s quantitative management managing director, said the market should chart some gains, though in “an unusually perilous time.”

John Praveeen, chief investment strategist, predicted global stocks to “eke out” some gains, while chief market strategist Quincy Krosby sees a year of “risky business” where investors had better hedge heavily in a market where “you cannot afford to be in and you cannot afford to be out.”

So after a year when virtually every equity strategist overshot the market, some by a wide margin, who should investors believe?

Judging by recent behavior, they are more inclined to act on their own.

In December, bond and bond fund allocations hit their highest levels since November 2010, according to the American Association of Individual Investors. Investors yanked USD 131.8 billion from stock mutual funds in 2011, said Nick Colas, chief market strategist at ConvergEx.

Sam Stovall, chief equity strategist at S&P, advised clients this week to buy simply because the flat preceding year indicates that the market has nowhere to go but up. That’s a strategy that has served investors poorly, particularly over the past decade, but it`s a popular market meme these days.

Yet average investors remain unconvinced. Portfolio allocations average just 56.1% for stocks, below the historical norm of 60%, and the level of AAII bullishness is just a net 10 percentage points higher than the bears.

Still, the Wall Street chant of better days ahead for stocks remains.

In a word, it`s all about hope.

“During the first quarter of this year, it will likely become obvious whether fallout from Europe will end the US and global economic recoveries or whether recent evidence of US economic acceleration is for real,” Jim Pauslen, chief market strategist at Wells Capital Management, said in a note to clients. “And, if the US economy continues to persevere, rising confidence in the economy and in the financial markets should increasingly prove a dominant theme for the year.”

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Copyright 2011 cnbc.com

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

A flat market in 2011 could mean a rally this year

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Following last year’s pancake-flat finish for the S&P 500, most strategists agree that there is no other direction for markets than up in 2012.

For 2012, strategists’ average S&P year-end target is 1,350, a 7% gain from the index

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow