On August 31st, Real Estate will become the newest GICS sector and the first Level 1 addition since the framework was unveiled in 1999—REITs had been classified as an industry under the Financials sector.

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.

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.

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

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.

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.

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.

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.

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

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. 

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

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.

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.

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.

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.

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.

Despite recent bounce among stocks in the Energy sector, the GS Scores still rate Energy groups poorly.

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.

In conjunction with Materials’ solid rise in our sector rankings, we purchased Specialty Chemicals & Gases in the Select Industries Portfolio.

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.