• Major Trend

    MTI: Remains Bullish - Momentum Work Is Strong

    January 10, 2017 BY Doug Ramsey

    The Major Trend Index rose 0.04 points to 1.17 in the week ended January 6th, with gains in four of the five categories more than offsetting a sharp weekly decline in the Attitudinal work. We consider this work moderately bullish, and continue to position our tactical funds with net equity exposure of 63-64%.

     

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  • Stock Market

    “Changes In Attitudes, Changes In Latitudes”

    January 07, 2017 BY Doug Ramsey

    The above caption—and Jimmy Buffett song title—comes from the “View From The North Country” section in the first-ever Green Book published in November 1981. Not much has changed in 35 years.

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  • Bonds

    2017 Time Cycle—A Tale Of Two Halves

    January 07, 2017 BY Chun Wang

    In 2016, both the U.S. and the U.K. stock markets tracked their historical patterns quite well but other international equity markets and non-equity markets tracked poorly.

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  • Bonds

    U.S. Rates—Not A Bear Market Yet

    January 07, 2017 BY Chun Wang

    There are certainly better catalysts this time that make a bear market a distinct possibility, but until a decisive break occurs (most likely when the 10-year gets above 3%), the bull market is still intact.

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  • Stock Market

    2016’s Industry Group Dream & Nightmare Portfolios

    January 07, 2017 BY Kristen Perleberg

    For nearly three decades The Leuthold Group has tracked its hypothetical industry group portfolios composed of the previous year’s “Dreams” (best performers) and “Nightmares” (worst performers).

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  • Stock Market

    An Obligatory Rant Over High Valuations

    January 07, 2017 BY Doug Ramsey

    We remain cyclically bullish, but it would be intellectually dishonest to try to make a serious valuation case for the stock market here.

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  • Equity Strategies

    2016 GS Score Performance Challenges

    January 07, 2017 BY Greg Swenson

    After three consecutive years of positive performance, the Group Selection (GS) Scores struggled in 2016.

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  • Equity Strategies

    Sectors And Industry Groups On Our Radar

    January 07, 2017 BY Kristen Perleberg

    A look at various dynamics affecting sector results in 2016, and what we like going into 2017, both at the sector level and among groups.

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  • Inflation Watch

    Encouraged...But Not Counting Chickens Yet

    December 16, 2016 BY Chun Wang

    CPI numbers were largely in line. There are encouraging signs that inflation is turning on a global basis. The path to sustained higher inflation is not going to be a smooth one and too much enthusiasm can prematurely end this reflation theme. We are encouraged by the general uptrend in inflation and inflation expectations but certainly do not want to take higher inflation as a given.

     

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  • Bonds

    Trump Rally—More Tortoise & Less Hare Please

    December 07, 2016 BY Chun Wang

    Market reaction since the election has been right on the money. What we didn’t expect was the speed and the magnitude of the so-called “Trump Trade."

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  • Stock Market

    Stock Market Observations

    December 07, 2016 BY Doug Ramsey

    We revisit our “Red Flag Indicator” of prior bull market tops versus today. Usually most of these internal market measures will deteriorate in advance of the final bull market peak. At the latest S&P high, three of the seven leading measures had raised Red Flags, by not confirming, but two of them (DJ Transports and the NYSE A/D Line), are within just ticks of new bull market highs.

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  • Stock Market

    America’s Already First...

    December 07, 2016 BY Doug Ramsey

    Thanks to the U.S. dollar’s recent spike, foreign equities in dollar terms declined during November while the U.S. markets were celebrating a Trump victory. Thirty-nine of the 49 MSCI country indexes are in bear market territory from the perspective of a dollar-based investor.

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  • Of Special Interest

    Quantitative Factor Performance: Year In Review

    December 07, 2016 BY Greg Swenson

    Factor performance during 2016 is the reverse of that of 2014-2015. Quants and smart beta funds focusing solely on Value have enjoyed the year, while multi-factor approaches have struggled. Value has been the only factor that has provided positive performance this year.

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  • Stock Market

    Does Returning Cash Crowd Out Capex?

    December 07, 2016 BY Jun Zhu

    Companies are returning cash to investors at a level never before seen. Does the historically high level of cash being returned to shareholders crowd out the use of cash elsewhere? One wide-spread concern is that by shelling out cash through dividends and share buybacks, companies are spending less on capital expenditures. Is that a real concern?

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  • Equity Strategies

    Financials With Post-Election Appeal

    December 07, 2016 BY Kristen Perleberg

    Forces specifically driving many Financials groups include expectations for an ongoing yield rally and a steepening yield curve, tax cuts, and loosening financial regulation. While these outcomes remain largely speculation, the odds have improved and any of these developments would be a welcome change.

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  • Inflation Watch

    Higher Inflation Not Imminent

    November 18, 2016 BY Chun Wang

    · Headline CPI was in line but Core CPI missed.

    The powerful prospect of a huge fiscal stimulus, a substantial tax cut and meaningful deregulation stoked hopes for higher growth and inflation. The Trump-induced reflation trade is still considered risk positive.  The market is putting a lot of faith in Trump’s new policy package but its actual impact on the economy remains to be seen.

     

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  • Stock Market

    The “Low Vol” Unwind: Just The Beginning?

    November 05, 2016 BY Doug Ramsey

    In mid-summer we suggested that attaining new market highs would probably require a rotation away from the long-time Low Volatility market leaders and into High Beta areas like Technology and industrial cyclicals.

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  • Stock Market

    Not Much “Lift” From VLT “BUY”

    November 05, 2016 BY Doug Ramsey

    In the June Green Book, we professed some skepticism surrounding the long-term, “low-risk” BUY signal for stocks that was triggered at the end of May by our Very Long Term (VLT) Momentum algorithm (also known as the Coppock Curve).

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  • Stock Market

    A New Take On The Labor Market

    November 05, 2016 BY Doug Ramsey

    Politicians bemoan the lack of “good-paying jobs,” but what’s the current perspective of employers? According to a simple measure developed by economist Edward Renshaw many decades ago, employers see a lack of “unused labor capacity” in the U.S. that should lead to yet another year of disappointing GDP growth in 2017.

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  • Stock Market

    Can Companies Sustain Cash Payouts?

    November 05, 2016 BY Jun Zhu

    Companies are returning cash to investors at a level never before seen. Counting dividend payouts and outstanding share repurchases, the amount of cash returned back to investors crossed the $1 trillion mark for the first time in January 2016 (based on trailing twelve-months’ total for the largest 500 companies, Chart 1).

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