These tables identify and compare important characteristics of the broad sectors of the S&P 500, along with the S&P Mid Cap and Small Cap indices.

The Equal Weighted index also outperforming YTD.

20 Year T-Bond: 5 3/8’s, Maturity: 2/15/2031, YTM 2.88% (vs. April 30th YTM at 2.39%)

High yield bonds are not immune to the tapering of QE.

Inflows into Muni bond funds turned negative; higher interest rates currently the biggest risk.

Consistent with our overall cautious view on credits, we still like “safe spreads”.

The RAI rose in May and stays on a “High Risk” signal. We remain cautious and recommend higher quality within fixed income.

April inflation numbers were generally lower than expected. We are shifting out our inflation outlook by six months. We believe inflation will be a non-factor for the next six months but will increase moderately in the following six months.

The global yield curve is in a sideways range bound pattern, indicating anemic demand for credit. An examination of developed and emerging countries confirms our “muddle through” view.

We think the 10-year yield will likely consolidate around 200-215 before taking a shot at 245. The 245 level looks like a strong barrier and will likely hold in the foreseeable future.

Property & Casualty Insurance, Life & Health Insurance, Restaurants, and Apparel, Accessories & Textiles all moved into the top quintile.

Info Tech remains the largest sector short position, while Energy is second.

Q1 earnings reports look weak at a reading of 1.38, the lowest one-month reading since Q4 2009.

Consumer Staples are top-ranked in the domestic model but appear particularly Unattractive in the global model, which continues to be dominated by the Financials.

We weren’t prepared to find industry price trend persistence so much more predominant at the global level than it was domestically.

Each of these effects has diminished in importance over time, but it’s still worth taking a look. Momentum is best at capturing the Industry effect, while Valuation works best at the Country level.

While U.S. stocks have surged this year, Emerging Markets have languished. What is going on in Emerging  Markets to cause this unusual situation?

The Dow Jones Corporate Bond Index has worked in eight of the last nine decades. The credit information in corporate bond prices provides valuable input for investors.