Valuations
Major Trend Index Still Says Bear
Major Trend still in "negative" territory and continues to deteriorate. Downside equity market risk viewed as significant.
A Fresh Look at Upside and Downside Potential
Even after the March correction, this valuation exercise uncovers only limited upside (+15% to 1987 peaks) and significant downside (-25%, back to median valuations).
In Search of a New P/E Ratio
As we maintain our "tactically bullish" attitude toward equities, we continue to search for further signs that this market is not as overvalued as it appears.
Major Trend Index Edges Into Positive Territory
Are you surprised? We certainly were. The Major Trend Index has moved slightly above the neutral no man's land, but not by much.
View from the North Country
In terms of outstanding investment returns from U.S. markets, the last 10 years have been close to unprecedented but the next decade in this business won't be so easy. This is what our historical research and common sense tells us.
“Is the Stock Market Really That Overvalued?”
During November, a California client brought up an interesting point relating to P/E valuations and to our historical studies of stock market P/E ratios. “How would today's typical P/E compare with the typical P/E of the past?”
Inside the S&P 500, 400 and the DJIA
From time to time, there are client inquiries concerning the foundations of The Leuthold Group’s fundamental intrinsic value judgements, relating to the S&P 500, 400 and the Dow Jones Industrials. Here is a current data summary regarding these three stock market indices.
How High Is High?
The Leuthold Group’s Intrinsic Value Benchmarks provides another way of estimating upside potential for the DJIA and S&P 500. Based on the past history of bull market valuation levels, where might the stock market be 12 months from now?
Stocks Not Cheap, Stocks Not Expensive
Stocks are now in the high 40%-45% of the historical valuation distribution range. This is not cheap, but neither is it expensive. Based on our Benchmarks work, it now appears we can expect average performance for the stock market from today’s levels over 1, 3 and 10 year time horizons.
Has the Market Hit Bottom?
The Major Trend Index still negative but improved last week. I doubt that the market has recorded its bear market low, but I do think we are getting close.
View from the North Country
Bring on the Mystics, Special Situation Research...Correction, Correction, Australian Bonds...The Right Guys Won, The Japan Factor
Indicators Continue to Deteriorate
Our composite Major Trend Index has continued to deteriorate and is decidedly negative. It is no longer just the Intrinsic Value measures that are warning us of trouble ahead.
“April Must Have Been Dull”
When the closing bell sounded on April 30, the market averages were down very little from the month before. To the casual observer, it might appear to have been a dull quiet month. But to those on the floor, in front of a quotron, or even reading the daily financial pages, it was anything but.
More Cautious
A month ago, this publication recommended clients start moving toward a defensive posture. Our cautious stance toward the stock market is essentially unchanged from last month. If anything, we have become more cautious.
Benchmarks……Intrinsic Value
It has been only two months since we last published our “Histographs” covering stock market P/E’s, dividend yields and book value ratios. But, 1987 estimates are now included and of course, the stock market has made a big move. It is time for an update.
Statistics for Your Files
A number of clients have requested historical data regarding earnings, dividends and book values for the stock market indices. This section provides information, going as far back as 1910.
Inside the Stock Market
The Major Trend Index shifted to Negative status as noted in the special May 22 Interim Memo. However, downside vulnerability appears quite limited. At any rate, expect a good market in the last half of 1984. It is too late in the decline for most to build cash, although some futures hedging may be appropriate for those who can.
Common Stock Dividend Yields and DJIA 3000
In this “In Focus” feature, 103 years of common stock dividend yields are compared. Today’s prevailing yields are put in historic perspective. Then various future stock market models are constructed, employing a variety of future earnings and dividend growth rates. Considering dividend yield history, the “super bulls” target of DJIA 3000 before the end of the decade seems close to impossible.
Perception for the Professional
March 2026 Issue
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