18 Jun The Lato Letter: Volume 1, Issue 18.
With the Greek election results behind us, markets have one less set of headlines to deal with. The results of the election were favourable as the anti-bailout party Syriza was not victorious. However, equity markets rallied very briefly on the news before refocusing on the next headline issues such as this week’s Federal Open Market Committee (FOMC) meeting, the G-20 summit in Mexico and the continuing problems in Spain and Italy.
Underlying all of the headlines is the fact that equity markets are historically very undervalued and are still being fuelled by very accommodative monetary policy, particularly in the US. Don Hays of Hays Advisory discusses the impact of the favourable monetary policy and current market conditions in his commentary today. To read the article, click this link and then click “The Bottom Line is…”. Bottom line of the article is that although perhaps not out of the woods yet, markets are positioned for better returns ahead.
If there is any part of the article that requires explanation, please feel free to contact me and I will be happy to discuss it with you. You will also notice that each page of the article has a note that says “Don Lato has agreed not to share this commentary without permission from Hays Advisory”. Rest assured, I arranged permission many years ago.
While today’s market remains focused on macro issues, Apple has enjoyed a bit of a stealth move upward today after trending sideways for the last several weeks. As I write, the stock is up over $12.00 (or 2%) on rumours that iPhone 5 may be released as soon as September. The rumour is no reason to own or buy the stock, but the underlying strong fundamentals and extremely low valuation certainly are as we are now less than six weeks from their next earnings release.
If you are still reading, I will be appearing on BNN’s Market Call Tonight this Wednesday, June 20th at 6pm. As always, the video will be posted in the Library section of this website.
To receive The Lato Letter by email from now on, please click here.