• 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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  • Major Trend

    Breadth Data Suggests Higher Highs Next 3-6 Months

    July 19, 2016 BY Doug Ramsey

    Again driven by a large gain in the Momentum/Breadth/Divergence category, the Major Trend Index tacked on another 0.05 points to land at a moderately bullish ratio of 1.14 based on data for the week ended July 15th.

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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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  • 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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  • 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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