• Major Trend

    MTI Comfortably Positive

    August 23, 2016 BY Doug Ramsey

    The Major Trend Index rose 0.01 to a ratio of 1.24 based on data through the week ended August 19th. This is comfortably above the MTI neutral zone of 0.95-1.05 and supports our tactical funds’ 60% exposure to equities.

     

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  • Stock Market

    Bubble Or Not?

    August 05, 2016 BY Doug Ramsey

    To revisit the all-time valuation peak of March 2000, the S&P 500 would have to reach 3455 (not a forecast!). A reversion to 1957-to-date median valuations implies an S&P 500 loss of 22%. That’s a serious loss, but hardly on the order of a “busted bubble.”

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  • Stock Market

    More Upside For Small Caps?

    August 05, 2016 BY Doug Ramsey

    There was a major cyclical BUY signal (VLT Momentum) for the S&P 500 in late-May, and as of July’s close, that bullish development was reinforced by a new VLT BUY signal on the Russell 2000.

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  • Stock Market

    Divergence Among Quality Factors

    August 05, 2016 BY Jun Zhu

    Performance and valuation of the three Quality factors are diverging. From a valuation standpoint, we might see a reversal in performance, with the Stability factor weakening and the Leverage factor strengthening.

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  • Quant

    July Factor Performance

    August 05, 2016 BY Greg Swenson

    Value was the only factor category that worked during July. Being the one factor that currently offers rising interest rate exposure, Value has performed inversely to every other category for most of 2016.

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  • Bonds

    Policies Trump Politics

    August 04, 2016 BY Chun Wang

    We find ourselves in the twilight period where the impact of a rate hike might be waning, while the potential election-year impact might be gaining more influence.

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  • Stock Market

    Active vs. Passive: A Three-Club Headwind

    July 26, 2016 BY Scott Opsal

    Actively managed funds have recently underperformed passive indexes. As a result, fund inflows and deposits have favored passive funds.

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  • Inflation Watch

    Inflation-A Slow Burning Fuse

    July 18, 2016 BY Chun Wang

    The latest CPI reading is positive for the overall risk rally. We continue to recommend a more patient approach towards inflation. The key market-based drivers of inflation have turned negative. But the recent key economic numbers have mostly exceeded expectations.

     

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  • Stock Market

    Stock Market Observations

    July 08, 2016 BY Doug Ramsey

    With the S&P 500 levitating near its all-time high, stock market leadership is peculiar—characterized by a flight to quality. And, despite the market’s violent bounce off February lows, there have been only four new market highs set by key indexes on our “Bull Market Top Timeline” table.

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  • Stock Market

    Low Vol Divergence, Episode 3

    July 08, 2016 BY Doug Ramsey

    The divergence between S&P 500 Low Volatility and High Beta Indexes has emerged for the 3rd time in a year. The 3-month performance spread is even more extreme than it had been on the eve of either the August or December stock market air pockets.

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  • Stock Market

    “Index Rebalance Effect” Once Again Proven

    July 08, 2016 BY Jun Zhu

    Validating results of a prior study, a look at the last four MSCI index rebalances shows that stocks soon to be added outperform from Announce Date to Effective Date, while deleted stocks underperform.

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  • Bonds

    A Tale Of Two Exits—How Different Is This Time?

    July 07, 2016 BY Chun Wang

    We think the best guide for Brexit is still the 1992 U.K. exit from the ERM. However, most U.K. assets are more expensive than they were back in 1992, and thus more vulnerable to shocks. 

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  • Of Special Interest

    Valuation Metrics: Numerators & Denominators

    July 07, 2016 BY Scott Opsal

    Different measures of value may tell different stories. Using various metrics, we examine the valuation of Large Caps, Small Caps and equity sectors.

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  • Equity Strategies

    Electronic Manufacturing Services: Attractive

    July 07, 2016 BY Kristen Hendrickson

    The EMS group (from the Info Tech sector) now ranks as the third highest of 115 industries.

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  • Quant

    June And First Half Factor Performance and The Brexit Impact

    July 07, 2016 BY Greg Swenson

    Factor performance was muted prior to the vote; it turned volatile in the remaining days of June following. Momentum was the only factor to work before and after June 23rd — the day of the Brexit vote.

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  • Major Trend

    MTI Remains At Neutral

    July 06, 2016 BY Doug Ramsey

    The Major Trend Index edged up 0.02 points to a ratio of 1.04, using data through the week ended July 1st, and remains within its 0.95-1.05 neutral zone for the second consecutive week.

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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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