• Profit Margins At The Sector Level

    May 06, 2016 BY Doug Ramsey and Michelle Garofalo

    S&P 500 profit margins mask the disparate trends taking place on a sectoral level. We dissect those trends with the ten major sectors grouped by five broad themes: Cyclicals, Commodities, Defensives, Interest Sensitives, and Tech/Telecom.

    The full content of this page is available to research clients only.

    continue reading

  • Major Trend

    MTI Positive; Few Changes Among Category Readings

    May 24, 2016 BY Doug Ramsey

    The Major Trend Index remained in moderately bullish territory, falling 0.03 points based on data through last week. A 75-point loss in the Momentum/Breadth/Divergence work was the only outsized move among the five indicator groupings. This category, however, remains the strongest pillar underlying the MTI with a current net reading of +440.

    The full content of this page is available to research clients only.

    continue reading

  • Inflation Watch

    Inflation Exceeded Expectations In April

    May 18, 2016 BY Chun Wang

    Inflation exceeded expectations in April. The more durable inflation measures such as wage inflation are also improving. We characterize the recent improvement in inflation as a relief from the threat of deflation but still quite far from being a catalyst for run-away inflation.

     

    The full content of this page is available to research clients only.

    continue reading

  • Stock Market

    Small Caps: The P/E Premium Lives On…

    May 06, 2016 BY Doug Ramsey

    Small Cap valuations may look better on a relative price-to-book basis, but we still believe their Normalized P/E ratios will suffer further compression before Small Caps reclaim the leadership baton.

    The full content of this page is available to research clients only.

    continue reading

  • Stock Market

    Sell In May: Statistical Update

    May 06, 2016 BY Doug Ramsey

    If this year’s interest in the “Sell In May” phenomenon is any indication, there remains plenty of skepticism surrounding the market’s recent rebound. The good news is that the “Sell In May” play has been weakest during presidential election years.

    The full content of this page is available to research clients only.

    continue reading

  • Bonds

    Reflation Trade Back In Vogue? We’d Rather Be Late Than Early

    May 06, 2016 BY Chun Wang

    Despite recent improvement in some inflation measures, we are not convinced the war against disinflation has been won. The risk of being too early on the inflation call far outweighs the risk of being too late.

    The full content of this page is available to research clients only.

    continue reading

  • Equity Strategies

    Building Products Group = Attractive

    May 06, 2016 BY Kristen Hendrickson

    We recently purchased the Building Products group in our Select Industries Portfolio. Strong trends in existing U.S. home sales and the remodeling market, coupled with slow but steady growth in new construction, should bode well for future Building Products group performance.

    The full content of this page is available to research clients only.

    continue reading

  • Major Trend

    MTI Holds Positive; Momentum Measures Strong

    April 26, 2016 BY Doug Ramsey

    Based on data through the week ended April 22nd, on the back of a 100-point gain in the Momentum/Breadth/Divergence category, the Major Trend Index pushed a bit further into positive territory, rising 0.03 points to a 1.13 ratio. Leuthold tactical portfolios remain positioned with net equity exposure of 54%.

    The full content of this page is available to research clients only.

    continue reading

  • Inflation Watch

    Inflation-Patience Recommended

    April 15, 2016 BY Chun Wang

    Inflation missed expectations in March.  The three key inflation drivers this year - oil, the Dollar and the Chinese yuan, are all going in the right direction.  The risk of being too early on the inflation call far outweighs the risk of being too late.  Patience is still recommended.

     

    The full content of this page is available to research clients only.

    continue reading

  • Of Special Interest

    Implications Of Low Growth, Low Inflation, Low Rates

    April 07, 2016 BY Chun Wang

    The current environment will likely persist longer than most expect which will put further downward pressure on profit margins. As margins come under pressure, companies increase leverage to prop up ROE. However, the market wants higher duration, not higher leverage.

    The full content of this page is available to research clients only.

    continue reading

  • Stock Market

    High Quality Stocks Slightly Underperform YTD

    April 07, 2016 BY Jun Zhu

    Even though Low Quality spends the majority of time outperforming, investors benefit exponentially from holding High Quality during the bad times.

    The full content of this page is available to research clients only.

    continue reading

  • Bonds

    The Fed’s Capitulation To The Dovish Side— A Win-Win For EM & U.S.

    April 07, 2016 BY Chun Wang

    We have mentioned a number of times that China had experienced a very unpleasant “second-hand” tightening due to its peg to the dollar. Its trade competitiveness has suffered tremendously. With a weaker dollar the Chinese Yuan can re-gain some of its competitiveness while maintaining its peg to the dollar. A rare win-win in today’s convoluted world of finance.

    The full content of this page is available to research clients only.

    continue reading

  • Stock Market

    Improving Indicator Evidence

    April 07, 2016 BY Doug Ramsey

    Last spring’s “Double Death Cross” in the Dow Transports and Dow Utilities had been partially reversed even before the February low, when the Dow Utilities’ 50-day moving average crossed above its 200-day moving average (thereby issuing a “Golden Cross”). The Dow Transports remain in a bear pattern based on the 50/200-day relationship, but the gap is closing fast.

    The full content of this page is available to research clients only.

    continue reading

  • Equity Strategies

    Insurance Theme Intact Among Top GS Scores

    April 07, 2016 BY Kristen Hendrickson

    Group Selection (GS) Score strength among insurance-related industry groups has been a long-running theme within our quantitative framework.

    The full content of this page is available to research clients only.

    continue reading

  • Inflation Watch

    Inflation Modestly Exceeds Expectations

    March 23, 2016 BY Chun Wang

    Inflation met or modestly exceeded expectations. The three key drivers for inflation (oil, the Dollar and the Chinese yuan) continued to improve. But we are not rushing to declare victory on disinflation. “Organic” inflation, such as sustained wage inflation, has been very elusive so far.

     

    The full content of this page is available to research clients only.

    continue reading

  • Stock Market

    Labeling The New Up-Leg

    March 08, 2016 BY Doug Ramsey

    The short-term market surge certainly possesses the hallmarks of many previous bear-killers (or correction-killers)…but it also sports the look of many historical bear market rallies.

    The full content of this page is available to research clients only.

    continue reading

  • Stock Market

    Is Defense Overpriced?

    March 08, 2016 BY Doug Ramsey

    Relative valuations of Staples and Utilities sectors already reflect a “flight to quality” effect. Investors looking to add some economic/stock market defense should focus on the cheaper Health Care groups.

    The full content of this page is available to research clients only.

    continue reading

  • Of Special Interest

    Big U.S. Banks: We Have A Motion, Is There A Second?

    March 08, 2016 BY Scott Opsal

    YTD the S&P 500 has fallen 2% while the S&P 500 Banking industry group is down over 12%—a shortfall that has the attention of value investors and contrarians seeking a chance to buy high-quality banking franchises at fire-sale prices.

    The full content of this page is available to research clients only.

    continue reading

  • Equity Strategies

    Bottom-Fishing In Energy: Beware Of Bankruptcy Risks

    March 07, 2016 BY Jun Zhu

    New developments have lifted sentiment toward oil and Energy names, but we caution bottom-fishers to be mindful of risks. The fundamentals in the oil patch do not yet support strong oil prices going forward.

    The full content of this page is available to research clients only.

    continue reading

  • Equity Strategies

    Our Most Contrarian Group Ideas

    March 07, 2016 BY Greg Swenson

    We use our Group Selection (GS) Scores to identify the potential for a catalyst, and to gauge the health and future performance potential of those groups out of favor by analysts.

    The full content of this page is available to research clients only.

    continue reading

  • Equity Strategies

    Purchased Specialized Finance: GS Score Surges

    March 07, 2016 BY Kristen Hendrickson

    We see solid prospects for potential industry growth; consolidation and a full-blown industry evolution have resulted in group constituents having more in common than ever before.

    The full content of this page is available to research clients only.

    continue reading

Sign-in to your Account