07.15.2010 / Market Analysis Recap. Posting by Stephen Frantz, President, Tributary Capital Management.
After 13 months of unmitigated gains in US based stocks, the month of May saw a continuation of profit taking that began in April. On a relative performance basis, Small Cap domestic, or U.S. based, stocks outperformed both Large Cap domestic and Foreign stocks by a significant margin, a trend that began in March, 2009.
It appears that markets are trying to find a point of equilibrium, commonly referred to as "support" level around 1000 for the S&P 500 and 10,000 for the Dow. Stocks look attractively valued based on consensus forecasts, selling at about 13 times next year earnings. There remains in our judgment significant headwinds to long lasting economic recovery, and our struggle is not over calibrating down side risk for our clients so much as identifying and understanding the catalyst that will drive stocks higher over the short-run. For more information on Tributary Capital Management, visit tributarycapitol.com or email info@tributarycapital.com.
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Comments are provided as general market commentary and should not be considered investment advice or predictive of any future market performance. Past performance does not guarantee future results.
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