• Inflation - It Will Get Worse

    August 20, 2015 BY Chun Wang

    The current inflation numbers are not yet reflective of the recent sell off in oil prices so we expect even weaker inflation going forward.

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  • Major Trend

    Major Trend Index Falls Further

    August 19, 2015 BY Doug Ramsey

    The Major Trend Index fell a bit further into negative territory in the week ended August 14th, dropping 0.02 to 0.88. 

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  • Bonds

    Re-Deflation: Lower Rates, Wider Spreads

    August 07, 2015 BY Chun Wang

    Re-deflation is the period where reflation gives way to deflation or disinflation. It has been so prevalent that it triggered a new “Higher Risk” signal in our Risk Aversion Index.

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  • Equity Strategies

    Homebuilding, More Than Just Curb Appeal?

    August 07, 2015 BY Kristen Hendrickson

    While this Consumer Discretionary group has not experienced six-plus-years of market outperformance, we think it may be poised for a late-game bounce. An overall lack of housing options may be just what this industry needs to give it a long-awaited boost.

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  • Stock Market

    Fed Watching For The 21st Century

    August 07, 2015 BY Doug Ramsey

    Deteriorating stock market breadth and worrisome leadership trends both suggest liquidity has already tightened; whether the Fed follows suit in September may now be just a formality.

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  • Stock Market

    The 30/30 Club!

    August 07, 2015 BY Doug Ramsey

    The S&P 500 Energy sector’s latest plunge puts it down by almost a third in the last 14 months. It now belongs to an exclusive list of sectors which have declined 30% on both an absolute basis and relative to the S&P 500!

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  • Of Special Interest

    Value, Momentum, And The Stock Market Cycle

    August 07, 2015 BY Doug Ramsey

    Conventional measures of market action, like breadth and industry leadership, point to the formation of a bull market top. Divergences abound.

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  • Major Trend

    MTI At Low End Of Neutral - Equities Hedged Further

    August 06, 2015 BY Doug Ramsey

    The MTI is holding just above the Negative zone and net equity exposure was reduced to 48-49% in the Leuthold Core and Global Portfolios (from 55% in early July, and 61-62% in June).

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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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  • Of Special Interest

    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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  • 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

    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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