DJIA: 17,841.98  -86.22 (-0.48%) | NASDAQ: 4,919.644  -19.683 (-0.40%) | S&P 500: 2,080.15  -9.31 (-0.45%) Markets status unavailable

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    Britain's FTSE 100 index is seen opening down by around 14 points, or 0.2 percent lower on Thursday, with uncertainty ahead of the country's national election set to weigh on the market, according to financial bookmakers. * The UK blue chip index closed up 0.1 percent at 6,933.74 points on Wednesday.

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    Financial spreadbetters predicted Britain's FTSE 100 to open about 14 points lower, or down 0.2 percent, Germany's DAX to fall 8 to 9 points, or 0.1 percent, and France's CAC 40 to drop around 10 points, or 0.2 percent, on Thursday. EUROPEAN COMPANIES REPORTING: Q1 2015 Enel SpA Earnings Release. Q1 2015 Telecom Italia SpA Earnings Release. Q1 2015 Commerzbank AG Earnings Release.

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    Hong Kong stocks on course for sixth straight day of losses. Stocks across Asia fell Thursday on concerns about the sluggish U.S. economy and overvalued equity markets, with Shanghai dropping the most and extending a deep two-day correction. The Shanghai Composite Index was down 1.6% at 4,159.42 after losing 5.6% in the past two sessions.

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    * Dollar index hits two-month lows. * Euro breaks above $1.13 for the first time since late Feb. * Sterling on defensive for UK elections. * Aussie up slightly after fall on local job data. By Ian Chua and Hideyuki Sano.

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    Here are some factors that may affect Middle East stock markets on Thursday. INTERNATIONAL/REGIONAL. * GLOBAL MARKETS-Asia slips, euro hovers at 2-month peak amid global bond rout. * PRECIOUS-Gold capped below $1,200 as bond yields jump. * Oil prices fall after hitting 2015 highs. * MIDEAST STOCKS-Gulf markets rise as oil hits new 2015 high.

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    For months, it seemed like nothing could stop eurozone government bond yields from falling. In a strange way, that has turned out to be true: despite the absence of any real catalyst, the market has slammed into reverse. That has been painful, but may ultimately be good news if it makes investors less complacent.

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    Even as oil rallies back above $60 a barrel, obituaries are being drafted. Oil majors face questions from shareholders concerned the threat of climate change means some of the reserves underpinning the companies will never be produced. In a recent report, HSBC urged investors to plan for this risk of "stranded assets."

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    * Nikkei downside seen below 18,500, analysts * Renesas soars on report of first-ever net profit By Ayai Tomisawa TOKYO, May 7 - Japan's Nikkei share average fell to a one-month low on Thursday as a worldwide drop in government bond prices spread unease to Japanese stocks during this week's national holidays, compounded by a sell-off on Wall Street.

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    On Wednesday, Federal Reserve Chair Janet Yellen said that even though "risks to financial stability are moderated," stock prices are still "quite high" right now. Markets, though, shrugged off this concern. The Standard & Poor's 500 was only down 0.78 percent on the day.If this is our "irrational exuberance" moment, it's not much of one — not that the original one was either. That came back on Dec. 5, 1996, when, in the middle of an otherwise unremarkable speech, then-Fed Chair Alan Greenspan asked "how do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions as they have in Japan the past decade." Japan's stock market, as economist Robert Shiller points out, promptly fell 3 percent, Hong Kong's did too, and then London and Frankfurt's dropped 4 percent. The U.S. stock market opened the next day down 2 percent, but rallied thereafter. And then it kept rallying for the next three years, before the boom turned into a bubble.Timing the market, in other words, isn't easy even if you're the Fed chair. Maybe that's why Greenspan didn't try again. But after the housing market's collapse nearly brought the entire global economy with it, the Fed realized that it couldn't blithely assume it could ignore what was going on and just clean up any financial mess. It'd have to do what it could—either talking down markets or regulating them or both—to keep the financial system safe without sacrificing the economy. That's why Yellen warned last summer that "valuation metrics" for "smaller firms in the social media and biotechnology industries"—aka startups—"appear substantially stretched." That only set off a short-lived sell off, though.Now, stocks have cooled off since the start of the year, but not that much. So does that mean stock prices are "quite high"? Well, that depends on how you look at it. Take Robert Shiller's cyclically-adjusted price-earnings ratio, or CAPE, which looks at the past ten years of earnings to figure out how pricey stocks are today. The idea here is that it smooths out any big ups or downs, and shows us how fairly valued—or not—stocks are. And by this measure, as you can see below, stocks really are getting expensive.The only problem is they've been getting expensive for awhile low. "According to CAPE," Crossing Wall Street's Eddy Elfenbein told me, "stocks have been valued above average for most of the last 25 years." Part of that is accounting standards are different than they used to be, so valuations are too—they're higher. Another part is that interest rates having been falling the last three decades, and, all else equal, lower rates should mean higher stock valuations. And the last part is that CAPE overweights what happened before to what's happening now. Think about it like this. Today's 27.2 CAPE ratio is so high, in part, because earnings were so bad during the financial crisis. But it's a little funny to say that a historically crummy economy seven years ago means stocks are overvalued now.Another way to look at this is to just consider last year's earnings. Now this has the opposite problem of only weighting what's happening now. So if earnings are negligible or negative, like they were in 2008, this will say that stocks are super expensive when they're actually super cheap. But as long as we keep that in mind, this still helps us look at stocks from a slightly different angle. And it tells us that, with a PE ratio of 19.7, the S&P 500 isn't a bargain, but it isn't exorbitant either. In other words, it's a little high, but compared to the last 25 years, not crazily so. (That'd be the tech bubble). Besides, it's a "misperception that the market falls due to valuation," Elfenbein says, when "more often stocks fall with lower fundamentals instead of prices soaring beyond fundamentals."For now, at least, those fundamentals are, well, okay. Sure, stock prices are elevated, but so are earnings. And really, where else are you going to put your money? Bank accounts barely offer any interest, and bonds are about as pricey as they could possibly be. That said, it's true that stocks have outpaced bonds enough that you should be at least a little wary.So stocks might not be quite high, but that depends on your definition of "quite." It's worth worrying about, and it's a good thing that the Fed is reminding us of that.




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    Hong Kong stocks headed for a sixth day of declines, as the Hang Seng Index dropped 0.6%. The mainland- China-tracking Hang Seng China Enterprises fell 0.8%. Chinese airlines fell sharply, after NYMEX crude oil prices China Eastern Airlines Corporation Ltd. sagged 4.8%, China Southern Airlines Co. Ltd. shed 4.4%, and Air China Ltd. lost 3.3%.

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    * Dollar index hits two-month lows. * Euro breaks above $1.13 for the first time since late Feb. * Sterling on defensive for UK elections. By Ian Chua. The dollar languished at its lowest in over two months against a basket of major currencies early on Thursday, under renewed pressure from disappointing data, while a further spike in German yields gave the euro some support.

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    The Treasury market sold off Wednesday, pushing yields higher for the eighth straight trading session--the longest losing streak since March 29, 2011, when prices fell for nine days in a row. The continuing meltdown in European bonds along with a statement by Federal Reserve Chairwoman Janet Yellen, who predicted a jump in long-term interest rates, fueled the selling momentum on Wednesday. Earlier in the day, a weak ADP employment report sparked a bout of buying in the Treasury...

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    GRAPHIC: Asia's block trades: http://link.reuters.com/ruw64w. By Elzio Barreto and Sumeet Chatterjee HONG KONG/MUMBAI, May 7 - As investors tap into rising Asia Pacific stock markets to sell assets in waves of block trades, Goldman Sachs' (GS) dominance of such deals has already brought more in fees in 2015 than in the previous two years combined.

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    * TSX down 150.05 points, or 0.99 percent, at 15,023.89. * Seven of the TSX's 10 main groups decline. By John Tilak and Solarina Ho. Canada's main stock index dropped about 1 percent on Wednesday, hitting a one-month low, as the victory of the New Democratic Party in oil-rich Alberta's provincial election hit energy shares.

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    * Canadian dollar at C$1.2040 or 83.06 U.S. cents * Bond prices mostly lower across the maturity curve By Solarina Ho TORONTO, May 6 - The Canadian dollar strengthened against its U.S. counterpart on Wednesday as crude prices surged to 2015 highs and the U.S. dollar stumbled on soft economic data, but gains were well-off highs hit earlier in the session.

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    Canada's main stock index dropped about 1 percent on Wednesday, hitting a one-month low, as the victory of the left-wing New Democratic Party in oil-rich Alberta's provincial election hit energy shares. The Toronto Stock Exchange's S&P/TSX composite index closed down 150.05 points, or 0.99 percent, at 15,023.89. Seven of the 10 main sectors on the index were in the red.

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    LAS VEGAS-- The leap in German bund yields over the last two weeks is another sign that liquidity issues could eventually present serious problems for financial markets, former Pimco Chief Executive Mohamed El-Erian on Wednesday warned at the annual SALT investment conference in Las Vegas. "There isn't the countercyclical risk-taking we need," said El-Erian, chief economic adviser at Pimco parent Allianz. That could spell trouble when there is a big shift market positioning, he...

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    Shares of Brazilian iron ore producer Vale  fell 5.91% to $8.28 in afternoon trading Wednesday as the Ibovespa declined. The Brazilian index fell amid speculation that the rally, which sent the valuation to five-year highs, was overdone, as analysts cut their earnings forecasts for Brazilian companies more than in any major market in the Americas, according to Bloomberg.