Stock take

On the markets: Strong earnings this week from Ford and 3M, among others, helped propel US indices forward, with the S&P 500 at its highest point since June 2008 and the Nasdaq trading at levels unseen since October 2007.

The earnings season is still young – just over a third of S&P 500 companies had reported by mid-week – but it looks almost certain this will be the ninth quarter in a row analyst estimates are surpassed, with approximately three-quarters of companies topping expectations so far. That’s higher than the previous eight quarters, although the “beat rate” has tended to wane as the season progresses. Crucially, a similar percentage is delivering revenue beats, in contrast to past quarters.

European markets remain below their 2011 high, however. Corporate results have been less impressive, with fewer than 60 per cent beating estimates.

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Silver lining: A fortnight ago, this column warned that silver, trading at $40, had “seldom looked so expensive”. It almost touched $50 on Monday.

Mea culpa? No. Such parabolic moves are typical of bubbles, which tend to unwind just as rapidly. Having traded more than 26 per cent above its 50-day moving average – no other commodity was remotely as overbought – the metal finally sold off, quickly falling below $45 on Tuesday. Silver has risen by almost 150 per cent over the last year and by 50 per cent since January. The gold:silver ratio, having this month fallen below 40:1 for the first time since 1983, fell to 32:1 on Monday.

Trading volumes, which hit record levels this week, have tripled over the same period. Leveraged exchange-traded funds, which allow traders to bet against silver, are also seeing record trading volumes. The huge volatility has resulted in a rise in margin requirements for speculators. Silver trading, it appears, is best left to those with strong stomachs.

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Mini Greek tragedy: A year ago, Greek leaders lashed out at “unprincipled speculators” driving up the cost of Greek debt, even though there was no evidence of excess speculation. These days, they’re whingeing about supposedly sinister e-mails regarding debt restructuring.

Greece’s finance ministry has asked prosecutors to investigate “possible criminal misconduct” following movements in bank shares and Greek debt. The “ridiculous” e-mail, sent by a Citigroup trader, was harmless. Briefly, it noted widening bond spreads and how, “if a credit event takes place”, debt haircut terms would be “crucial”. Politicians have been trying to distract attention from deteriorating fundamentals by lashing so-called speculators. It’s an increasingly silly game – in this case, the sell-off begun about 40 minutes before the e-mail was sent.