• MTI Falls To Neutral

    June 28, 2016 BY Doug Ramsey

    The Major Trend Index fell 0.12 to a Neutral ratio of 1.02 based on data for the week ended June 24th, led entirely by a decline in the Momentum/Breadth/Divergence category.

     

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  • Inflation Watch

    Inflation Remains Largely In Line With Expectations

    June 17, 2016 BY Chun Wang

    The latest jobs report disappointed but we think it’s a short term aberration as other data still point to a healthy job market. Some of the key market-based inflation drivers, however, have reversed course a bit in the last couple weeks. Patience is still the right strategy.

     

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  • Stock Market

    VLT Says “BUY”

    June 07, 2016 BY Doug Ramsey

    Breadth underlying the 4-month upswing has been stronger than that observed during any other rally leg since 2013. Despite just a 14% correction in the S&P 500 from its peak, a new VLT “BUY” signal was triggered. Failed signals are relatively rare, the last one occurred in December 2001.

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  • Of Special Interest

    Time For Materials?

    June 07, 2016 BY Doug Ramsey

    The Leuthold Materials sector jumped five spots to #3 in the June Group Selection (GS) rankings, its highest ranking in eight years and the first reading outside of the bottom four in almost four years.

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  • Equity Strategies

    Specialty Chemicals & Gases Soars To Attractive

    June 07, 2016 BY Kristen Hendrickson

    In conjunction with Materials’ solid rise in our sector rankings, we purchased Specialty Chemicals & Gases in the Select Industries Portfolio.

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  • Equity Strategies

    Energy Sector: Too Much Risk Taking As Oil Price Bounced

    June 07, 2016 BY Jun Zhu

    Despite recent bounce among stocks in the Energy sector, the GS Scores still rate Energy groups poorly.

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  • Equity Strategies

    Glamour Growth Stocks: Better For The Long Haul

    June 07, 2016 BY Jun Zhu

    Are Glamour Growth stocks a good investment? Using data from the past 30 years, we found very different outcomes depending on the duration of investment. The best results are attained with a long-term holding period in mind.

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  • Stock Market

    Apple Falls To Earth

    June 07, 2016 BY Phil Segner

    Following a brief re-admittance to the “Four Percent Club,” the value of Apple declined by the equivalent of one General Electric or two IBMs in the span of just over 14 months.

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  • Major Trend

    MTI Pushes To 3-Year High

    June 02, 2016 BY Doug Ramsey

    The Major Trend Index pushed further into bullish territory based on data through last week, rising 0.09 points to a three-year high 1.22 ratio. Improvement in both the Momentum and Economic categories drove the gain. In addition, there were positive developments based on yesterday’s month-end prices that will be captured in the next MTI reading.

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  • 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.

     

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  • 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.

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  • 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.

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  • Of Special Interest

    Profit Margins At The Sector Level

    May 06, 2016 BY 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.

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  • 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.

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  • 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.

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  • 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.

     

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  • 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.

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  • 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.

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  • 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.

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  • 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.

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  • 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.

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