• Navigating The First Rate Hike

    July 08, 2015 BY Chun Wang

    Our current view is the lift-off will be December or later. Assuming inflation will pick up and the Fed hikes the rate by the end of 2015, stocks will perform relatively well, with international stocks a better bet than U.S. stocks.

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  • Inflation Watch

    Inflation—Expecting More Drag From Oil

    July 20, 2015 BY Chun Wang

    With the recent weakness in oil prices and the renewed strength of the U.S. dollar, we would not be surprised to see weaker headline numbers in the next few months. The expectations of a rate hike might actually end up pushing the rate hike further out. We are now less sanguine about a pick-up in PPI in the rest of the year.

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  • Bonds

    Time Cycle Mid-Year Update: Going Off Script?

    July 08, 2015 BY Chun Wang

    Divergences have emerged: countries on a tightening path (e.g. US and UK) were more or less on track until June; while countries on an easing path (e.g. Germany, Japan, & Australia) went off script, as policy trumped historical patterns.

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  • Stock Market

    A Page For The Bulls

    July 08, 2015 BY Doug Ramsey

    One could conceivably argue the market is still “cohesive” enough to hold together for awhile longer. June 23rd saw closing bull market highs in the NASDAQ, Mid Caps, Small Caps (both the S&P 600 and Russell 2000), and the critical KBW Bank and NYSE Arca Broker/Dealer Indexes.

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  • Stock Market

    Leadership: Winning Begets Winning

    July 08, 2015 BY Doug Ramsey

    Many assume that stocks and industries exhibiting high price momentum suffer disproportionately during the eventual bear market. Surprisingly, the high momentum stock portfolio has suffered an average bear market loss that’s about a quarter less than that of the low momentum portfolio.

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  • Stock Market

    “Index Rebalance Effect” On Stock Performance

    July 08, 2015 BY Jun Zhu

    Stocks selected for inclusion in the MSCI ACWI have outperformed from the day of the announcement to the day of implementation, while the opposite is true for stocks which are removed. Long-term, however, stocks included in the index do not outperform compared to those that were removed.

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  • Equity Strategies

    Asset Management & Custody Banks: New Purchase

    July 08, 2015 BY Kristen Hendrickson

    The last time this group held an Attractive rating for an extended period of time was 2000. Based on the group’s extended underperformance, induced by repercussions of the global financial crisis, we think it may finally be poised for a turnaround. 

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  • Bonds

    Steeper Yield Curve: All About Inflation

    June 05, 2015 BY Chun Wang

    The steepening move in the yield curve is prevalent across many countries and is primarily driven by higher inflation expectations.

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  • Equity Strategies

    HR & Employment Services: Intriguing Candidate

    June 05, 2015 BY Kristen Hendrickson

    Until now, this group has been out of favor per our quantitative disciplines for the entirety of the bull market, making its newfound attractiveness particularly interesting. Even an 80% return in 2013 hasn’t brought relative performance back to levels achieved during the previous bull market.

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  • Stock Market

    The Double Death Cross!

    June 05, 2015 BY Doug Ramsey

    The Dow Transports and Dow Utilities both triggered major sell signals in May when their 50-day moving averages fell below their 200-day moving averages… known by some as a “Death Cross.”

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  • Stock Market

    Housing: Curb Your Enthusiasm

    June 05, 2015 BY Doug Ramsey

    Despite record low mortgage rates and pressure to re-loosen down payment and lending requirements, single family housing starts have yet to recover to levels consistent with even the average recession trough.

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  • Stock Market

    Searching For Growth In Emerging Markets

    June 05, 2015 BY Jun Zhu

    Even though the ten EM sectors are growing at a much stronger pace than corresponding U.S. sectors on the Top-Line, only a small margin exceed the U.S. in terms of EPS growth.

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  • Of Special Interest

    Cash Left The Sidelines Long Ago

    June 05, 2015 BY Doug Ramsey

    The “cash on the sidelines” is a Supply/Demand argument that we’ve struggled with even in the most bullish of times; every purchase of a security is matched with a sale. But even taking the argument at face value, current holdings of retail investors and mutual fund managers suggest that the cash left the sidelines long ago.

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  • Equity Strategies

    Bought Drug Retail = Consumer + Health Care In One Dose

    May 08, 2015 BY Kristen Hendrickson

    A new position in Drug Retail was added to the Select Industries Portfolio in April. The latest update to the Group Selection (GS) Score showed improvement in several factor categories which pushed the overall score back to Attractive.

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  • Equity Strategies

    Small Cap Biotech Valuations: Proceed With Caution

    May 08, 2015 BY Jun Zhu

    While Large/Mid Cap Biotechnology companies are boasting rising profitability, better cash flows, and stronger drug pipelines, the Small/Micro Cap Biotech firms, in general, have little tangible to show and valuations may be above the comfort zone.

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  • Stock Market

    Two Takes On The Ticker Tape

    May 08, 2015 BY Doug Ramsey

    Conventional breadth measures show the U.S. market to be healthy, with key indexes confirming the April 24th S&P 500 high. However, sector leadership is behaving in a way that’s consistent with an approaching market top.

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  • Stock Market

    Tech: One Year After The “Bust”

    May 08, 2015 BY Doug Ramsey

    At a time when social media stocks are the rage, stodgy “Old Tech” has quietly tacked on a 20% gain in the 13 months since the social media peak, while the NASDAQ Internet Index is still a bit below its March 2014 high. Yet, “Old Tech” P/CF remains below the level of 1995.

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  • Of Special Interest

    Faded Photographs: Obituary Of The Bull Market

    May 08, 2015 BY Doug Ramsey

    How will today’s bull market be viewed through the eventual clarity and objectivity of hindsight? We’ve pulled together several still frames that we think best capture the essence of this historic run.

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  • Major Trend

    MTI Spikes To 13-Month High In April

    May 07, 2015 BY Doug Ramsey

    New S&P 500 bull market high on April 24th confirmed by all manner of traditionally leading indicants.

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  • Bonds

    End Of The QE Trade? Too Early To Call

    May 07, 2015 BY Chun Wang

    The common driver behind the sharp reversal of many recent asset class trends is the unwinding of the ECB QE trade.

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  • Equity Strategies

    Can Consumer Discretionary Relative Strength Continue?

    April 08, 2015 BY Kristen Hendrickson

    Despite this sector’s extended outperformance, we think this trend may persist in the near term as Discretionary industry groups look increasingly attractive within our group work. Keeping an eye on the Fed Funds rate is key, however.

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