BondsOnline Advisor – August 2010

By Stephen Taub

The BondsOnline Advisor strives to present you with income investment insights from analysts throughout the United States.  Bonds, preferred stocks, real estate investment trusts, or master limited partnerships can be a part of a successful income portfolio – and BondsOnline and PreferredsOnline provide the “Income Investor Tools” to keep you informed.

For a list of securities, target prices, and detailed comments, get the current issue of Yield and Income Newsletter through PreferredsOnline.

Equity Strategies

Are we headed for a double-dip recession, or is the US economy going to continue growing at its very slow, uneven pace? Are we headed for deflation, or rip-roaring inflation due to all of the government stimulus and swelling deficit?

Credit Suisse is figuring on US growth not slowing below 2% next year or that global growth will slow below 3%. As a result, it remains overweight equities, although it concedes this is a difficult time: the gap between the free cash flow yield and corporate bond yield is the highest on its database since 1960.

JPMorgan remains pretty bullish: it recently raised its 2010 earnings estimate for the S&P 500 to $84 from $81 while maintaining its $90 estimate for 201. The bank believes 1300 on the S&P 500 is achievable by year-end.

Bank of America Merrill Lynch stressed in a recent note that despite lower GDP forecasts, its 12-month target on the S&P remains at 1350. The bank does not expect the Fed to lift interest rates until March 2012, and is overweight US financials, energy, tech, and staples.

Barclays is much less bullish than many other firms: its year-end price target for the S&P 500 is 1,210. However, Barclays also stresses it is positive on US stocks at current levels.

Energy Master Limited Partnerships

Morgan Stanley, JP Morgan Chase, Barclays, Citi, and UBS review nineteen MLPs this month in Yield and Income Newsletter.

REITs

JP Morgan Chase and Barclays report on six REITs this month.

Utilities

Credit Suisse recently told clients in a report it thinks an investment case can still be made for the regulated utilities, and reviews four.

Fixed Income Closed End Funds are reviewed by Stifel Nicolaus.

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