Spreadex Market Update
US equities are stable at the open
After closing out yesterday’s session at fresh all-time highs, US equities are stable at the open. The Dow Jones Industrial Average is holding above 16,500, as Exxon reports a significant beat against Q1 EPS estimates. The oil behemoth posted $2.10 of earnings per share for versus a $1.88 forecast. Shares were exchanging hands up ~0.5 percent on yesterday’s close in early trading.
Meanwhile, precious metals are struggling. Silver for July delivery sunk as low as $18.685 per troy ounce, down 2.5 percent. Gold, similarly, has softened. The $1,280 level is currently being tested. Investors understand the lack of inflationary pressure across the real economy, helping to keep a top on prices for now. It seems as though cheap money is still being used to hunt for yield in the equity and corporate bond markets for the time being.
Valuations across global, developed equities are starting to mature at these prices. Long gone are the days where investors could pick up next year’s earnings for less than 10 times across a basket of stocks. The abatement of the Eurozone crisis, low inflation and supportive central banks has helped make shares more expensive. But just how much more expensive can they get remains the golden question.
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