Green Book September 2003
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Featured Articles
August Mutual Fund Flows...Right In The Comfort Zone
Past bear market recoveries typically saw Main Street investors sit on the sidelines as market conditions improved…..but not this time.
Bond Market Summary
GDP growth of +4.0% projected for 2003. But, fast growing U.S. budget deficit is a significant problem for bonds.
Counting Sheep
September's first runner-up is from Pete “Snake” Johnson, friend of Leuthold, who now lives down in St. Albans, Missouri. Peter is also a frequent contributor to this section and we really liked this one.
Current Earnings Expansion In Perspective....Strong Recovery Continues
The current earnings expansion has so far lasted five quarters. Our projections: $53.50 2003E reported EPS, $58.00 in 2004.
Dissecting The VIX Index
VIX Index not effective as a sell signal, but very good on buy side. Ignore talk of current low VIX reading foreshadowing a market decline.
Fixed Income Hedge Reduced
Fixed income hedge in portfolios was reduced by one-half in mid-August following the spike in bond yields. TIPS for fixed income investors?…..You can lose money on Treasury Inflation Protected Securities (TIPS). You are protected against inflation but not sharp rise in interest rates.
Following The Script?
Yes September is most frequent month to produce declines, but average loss has been only a paltry 1.3%. Also, Septembers following bear market lows (like this year) actually produced strong performance.
Inflation Update…..Consensus View Underestimating Inflation Prospects
Consensus view (2% inflation rate by year end), is underestimating inflation prospects. We forecast 12 month CPI rising to +3.0 to +3.5% by year end. If we are correct, inflation is not fully incorporated into current bond prices.
Japanese ADRs...Rising Suns
A brief recap of our reasons for a bullish outlook on Japan’s stock market.
NASDAQ & NYSE Short Interest
New NASDAQ buy signal as volume declines. NYSE short interest ratio increases again as volume and short interest both decline.
New Select Industries Group Holding: Unregulated Energy Producers
Group rated Attractive since January, but continues to demonstrate quantitative strength and has now climbed to near the top of rankings.
Scanning The Markets
The equity market continued its strong performance in August.
Tech Watch
Still overweight Info Tech, but stock selection likely to get tougher in coming months.
View From The North Country
Even with a clearly improving economy, the deficit estimate for fiscal 2004 as been revised upward to $480 billion. Also, the investment survival value of opinion versus discipline and investing in actual physical industrial metals.
Volatility Update…..Both Indexes Show Lower Volatility In 2003
Volatility continues to fade in the S&P but remains volatile on a historical basis.
Table of Contents
Stock Market
- View From The North Country
- Following The Script?
- Current Earnings Expansion In Perspective....Strong Recovery Continues
- August Mutual Fund Flows...Right In The Comfort Zone
- Volatility Update…..Both Indexes Show Lower Volatility In 2003
- NASDAQ & NYSE Short Interest
Of Special Interest
Macro Monitor
Equity Strategies
- Japanese ADRs...Rising Suns
- New Select Industries Group Holding: Unregulated Energy Producers
- Scanning The Markets
- Tech Watch
Inflation Watch
At Random
August Mutual Fund Flows...Right In The Comfort Zone
Past bear market recoveries typically saw Main Street investors sit on the sidelines as market conditions improved…..but not this time.
Bond Market Summary
GDP growth of +4.0% projected for 2003. But, fast growing U.S. budget deficit is a significant problem for bonds.
Counting Sheep
September's first runner-up is from Pete “Snake” Johnson, friend of Leuthold, who now lives down in St. Albans, Missouri. Peter is also a frequent contributor to this section and we really liked this one.
Current Earnings Expansion In Perspective....Strong Recovery Continues
The current earnings expansion has so far lasted five quarters. Our projections: $53.50 2003E reported EPS, $58.00 in 2004.
Dissecting The VIX Index
VIX Index not effective as a sell signal, but very good on buy side. Ignore talk of current low VIX reading foreshadowing a market decline.
Fixed Income Hedge Reduced
Fixed income hedge in portfolios was reduced by one-half in mid-August following the spike in bond yields. TIPS for fixed income investors?…..You can lose money on Treasury Inflation Protected Securities (TIPS). You are protected against inflation but not sharp rise in interest rates.
Following The Script?
Yes September is most frequent month to produce declines, but average loss has been only a paltry 1.3%. Also, Septembers following bear market lows (like this year) actually produced strong performance.
Inflation Update…..Consensus View Underestimating Inflation Prospects
Consensus view (2% inflation rate by year end), is underestimating inflation prospects. We forecast 12 month CPI rising to +3.0 to +3.5% by year end. If we are correct, inflation is not fully incorporated into current bond prices.
Japanese ADRs...Rising Suns
A brief recap of our reasons for a bullish outlook on Japan’s stock market.
NASDAQ & NYSE Short Interest
New NASDAQ buy signal as volume declines. NYSE short interest ratio increases again as volume and short interest both decline.
New Select Industries Group Holding: Unregulated Energy Producers
Group rated Attractive since January, but continues to demonstrate quantitative strength and has now climbed to near the top of rankings.
Scanning The Markets
The equity market continued its strong performance in August.
Tech Watch
Still overweight Info Tech, but stock selection likely to get tougher in coming months.
View From The North Country
Even with a clearly improving economy, the deficit estimate for fiscal 2004 as been revised upward to $480 billion. Also, the investment survival value of opinion versus discipline and investing in actual physical industrial metals.
Volatility Update…..Both Indexes Show Lower Volatility In 2003
Volatility continues to fade in the S&P but remains volatile on a historical basis.
Stock Market
- View From The North Country
- Following The Script?
- Current Earnings Expansion In Perspective....Strong Recovery Continues
- August Mutual Fund Flows...Right In The Comfort Zone
- Volatility Update…..Both Indexes Show Lower Volatility In 2003
- NASDAQ & NYSE Short Interest
Of Special Interest
Macro Monitor
Equity Strategies
- Japanese ADRs...Rising Suns
- New Select Industries Group Holding: Unregulated Energy Producers
- Scanning The Markets
- Tech Watch
Inflation Watch
At Random
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