• Try This On For Size

    July 06, 2018 BY Scott Opsal

    Today’s market is barbelled regarding company size, with the mega-cap Tech stocks and the S&P 600 Small Cap index both outperforming the middle of the S&P 500.

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  • Don’t FADE Inflation Risk!

    July 16, 2018 BY James Paulsen

    Inflation/overheat worries have eased recently. The advance in the 10-year bond yield has stalled just below 3%, the upward trend in commodity prices paused once the U.S. dollar began rising in April, and wage inflation has failed to break above 3%. Indeed, the latest employment report left a goldilocks impression with a solid jobs gain, a rise in the labor force participation rate, and only a modest increase in wages. 

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  • COTW

    The Kindness of Strangers

    July 13, 2018 BY Scott Opsal

    We have recently been struck by the tremendous valuations being awarded to companies that have never turned a profit. Tesla, Spotify, Workday, and Square all sport market caps above $25 billion based not on their recent earning power (which is zip), but on the hopes that they will one day move well into the black.

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  • Inflation Watch

    Inflation—Largely In Line

    July 12, 2018 BY Chun Wang

    The year-over-year headline number was in line with market expectations but the month-over-month increase missed market consensus (0.1% vs. 0.2% expected). All else being equal, there is a good chance CPI might have peaked for 2018. A stronger dollar is disinflationary while the short term impact of tariffs is higher import prices.

     

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  • Major Trend

    MTI: Inflation Measures Retreat

    July 10, 2018 BY Doug Ramsey

    Our 52-week diffusion index on a 70-commodity basket now registers essentially neutral, while all of the non-energy commodity price sub-models have improved.

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  • Stock Market

    Inflation Warning Flags?

    July 07, 2018 BY Doug Ramsey

    After yet another benign figure on wages for June, the idea that inflationary pressures might be a problem for the stock market seems far-fetched.

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  • Bonds

    Investment Grade Widened More Than High Yield: Implications & More

    July 07, 2018 BY Chun Wang

    As credit spreads widened, something rather unusual happened: investment grade Corporate bonds performed far worse than High Yield bonds.

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  • Stock Market

    Trade-War Thematic Group

    July 07, 2018 BY Jun Zhu

    Trade wars or trade tensions, quietly started in 2017, hadn’t captured the market’s attention until early March this year—as demonstrated through a review of internet keyword search data of “Trade War” and “Tariff.” We present our Trade War thematic group which captures U.S. companies that could suffer the most from a trade war between the Trump administration and the rest of the world.

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  • Equity Strategies

    Discretionary Defies Gravity; Dept. Stores Purchased

    July 07, 2018 BY Kristen Perleberg

    Brick-and-mortar retail, not to mention antiquated Department Stores, have pretty much been declared dead in the age of Amazon. Often, this is when our GS Scores shine brightest... by picking industries that, at the time, are not intuitive and hard to stomach.

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  • Market Internals

    Small Cap vs Mid Cap vs Large Cap

    July 07, 2018 BY Phil Segner

    Our Ratio of Ratios has been stuck in the Small Cap premium range of 2% to 7% for the last ten months—limiting the ability to make a call on market cap preference with this vignette.

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  • Major Trend

    MTI: Market Not As Healthy Under The Surface

    July 03, 2018 BY Doug Ramsey

    We’d concede that neither the relative strength of Small Caps nor the divergently strong action of the NYSE Daily Advance/Decline Line fit the pattern of a stock market undergoing a late-cycle period of distribution, however, the relatively low percentage of NYSE issues now trading above their 30-week moving averages (45.5%) suggests the market may not be as internally healthy as popularly portrayed.

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  • Inflation Watch

    Inflation—No Surprises Here

    June 12, 2018 BY Phil Segner

    Headline and Core CPI figures hit estimates right on the nose in May, continuing the trend of modest but not outrageous price increases. Energy prices have boosted headline CPI while core CPI continues to be driven by services. With both of the Fed’s mandates pretty much accomplished, appreciate this rare window of time.

     

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  • A Growth Alert?

    June 08, 2018 BY James Paulsen

    This year started with strong expectations for economic growth. A substantial tax cut and evidence the global recovery had finally synchronized significantly raised expectations for both the pace of economic growth and corporate earnings results.. 

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  • Stock Market

    Is The Bull Just Napping?

    June 07, 2018 BY Doug Ramsey

    Old age has certainly put no limitations on the bull’s exploits, so we should be cautious in reading too much into its meandering recovery path. However, it’s possible that action since the February low is not a recovery process but rather a countertrend bounce within a larger downtrend.

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  • Major Trend

    MTI Now Decisively Negative

    June 07, 2018 BY Doug Ramsey

    Read this week's Major Trend Index.

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  • Stock Market

    Analysts, Summon Your Inner-Angler!

    June 07, 2018 BY Doug Ramsey

    Quantitative investment firms are increasingly touting the cross-disciplinary backgrounds of their research staffs, with prior high-level experience in areas such as medical research and engineering not uncommon.

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  • Of Special Interest

    Cycles And Taxes And GICS, Oh My!

    June 07, 2018 BY Scott Opsal

    Analyzing quarterly financial results and developing insights about upcoming periods is always difficult, but the first quarter of 2018 was unusually complicated.

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  • Bonds

    All Crowded Trades Are Vulnerable—Even The Yield-Curve Flattener

    June 07, 2018 BY Chun Wang

    Bond market volatility picked up quite a bit in May but the higher-low/higher-high pattern in the 10-year yield is still intact, indicating the primary uptrend has not reversed.

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  • Quant

    Narrow Momentum Performance Hard To Capture

    June 07, 2018 BY Greg Swenson

    While Momentum has worked very well during the last year, the best performance has been concentrated among the most expensive securities within the high Momentum group.

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  • Equity Strategies

    Transports Gain Momentum Amidst Struggling Industrials Sector; Railroads Purchased

    June 07, 2018 BY Kristen Perleberg

    Despite Industrials’ underperformance versus the broad equity market, the sector’s Transportation subset has been on the rise recently. In the latest round of our Group Selection (GS) Scores, four of the five Transportation groups rank Attractive, and the fifth one is rated High Neutral.

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  • Major Trend

    MTI: Sentiment Measures Decline

    June 05, 2018 BY Doug Ramsey

    A sharp loss in the Attitudinal category reflects declines in all major groupings of sentiment measures, ranging from investor opinion surveys, to fund flows, to option trading activity.

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