The reporting season has passed and it has been quite good superficially. The big difference from August 2015 is that the miners did the heavy lifting, while financial and rest was a big laggard.
The mid cap usually was the exception with some good results.
The big issue for the future is that most of the companies were focused on capital management, cost cutting and increased dividend payout (“search for yield”) which is now (on average!) 80%.
This paints an overall bleak picture for the future as really few companies are investing for growth. It shows that in the future the share selection will be more important than ever.
Also the commodities surge that helped the miners is also starting to end – the US dollar strenght and the recent hard run will see to that (Citi new iron ore forecast is USD38/40.
The oil run is also over – most of the demand was due to a strategic reserve replenishment by China. No one knows if it is ended, but it looks close to finish.
So – no escape for this market? Not at all – opportunity abounds…not in plain sight – the strategy of Big Bankers, Big Miners and the Big Retailers (or plain ETF) has ended.
investorpolitico 