CFD Index Name Changes

Index Tracker CFD and Stock Index names will be changing. Contract symbols, however, will remain the same. This change will be automatically applied to your trading platform and any open positions. Any workspaces saved with these instruments will also be automatically updated.

Average Stock Performance Since 11/20

While the S&P 500 is down 8.7% since last year’s closing low on 11/20, the performance of the individual stocks in the index has not been quite as bad.  For example, the average stock in the index is down a more modest 3.92%, while 40% of the stocks in the index are higher now than they were on 11/20. 

In the table below, we summarize the average performance of stocks since 11/20 according to sector.  As shown, Telecom Services and Technology have held up the best.  Of the nine stocks in the Telecom sector, the average change since 11/20 has been 22.4%, with six stocks actually having positive returns.  More importantly for the market (given its weight in the index), 73% of the stocks in the Technology sector are up since 11/20, and the average gain of all the stocks in the sector is 10.27%.

Not surprisingly, Financials are leading the market to the downside.  The average stock in the sector is down nearly 22% since 11/20, and only 21% of the stocks in the sector are higher.  Surprisingly, while the Utilities sector is usually a place to seek shelter in bear markets, during the most recent leg lower, it has been one of the weakest.  The average Utilities stock is down 15.25%, and less than 12% of the stocks in the sector are up.

Analysts missed the boat

Analysts completely missed the boat again with the subprime and credit crises. They should’ve given some early warning signs to investors to bail out, or at least lighten up their portfolios. That warning never came.”

-Jacob Zamansky, investor securities lawyer

Today’s Times looks at an issue that is one of our longstanding complaints: Wall Streets BUY bias.

Why is any of this still a surprise? Given the inherent conflict of interest between underwriting/syndicate and investing, it shouldn’t be.

The iBanks do not want to risk offending potential banking deals, M&A clients, or other corporate advisory.

Here’s an excerpt:

Even now, with the recession deepening and markets on edge, Wall Street analysts say it is a good time to buy.

Still.

At the top of the market, they urged investors to buy or hold onto stocks about 95 percent of the time. When stocks stumbled, they stayed optimistic. Even in November, when credit froze, the economy stalled and financial markets tumbled to their lowest levels in a decade, analysts as a group rarely said sell.

And last month, as the Dow and Standard & Poor’s 500-stock index suffered their worst January ever, analysts put a sell rating on a mere 5.9 percent of stocks, according to Bloomberg data. Many companies have taken such a beating in the downturn, analysts argue, that their shares are bound to bounce back.

Maybe. But after so many bad calls on so many companies, why should investors believe them this time?

When Internet stocks imploded in 2000 and 2001, Wall Street analysts were widely scorned for fanning a frenzy that had inflated dot-com shares to unsustainable heights. But this time around, credit rating agencies, mortgage companies and Wall Street bankers have shouldered much of the blame for the Crash of 2008, and few have publicly questioned the analysts who urged investors to buy all the way down.

Does this still surprise anyone . . . ?