Green Book May 2016
MTI Now Bullish, But Doubts Linger
Disciplines are disciplines, and we’ve responded to the indicator improvement by lifting most remaining hedges in our tactical funds.
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Major Trend Moved Into Moderately Bullish Zone
Riding a major upswing in the Momentum/Breadth/Divergence category, the MTI moved to positive for the first time in almost 10-months. Tactical Funds’ net equity exposure increased to near 55%.
Small Caps: The P/E Premium Lives On…
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.
Sell In May: Statistical Update
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.
Profit Margins At The Sector Level
S&P 500 profit margins mask the disparate trends taking place on a sectoral level. We dissect those trends with the ten major sectors grouped by five broad themes: Cyclicals, Commodities, Defensives, Interest Sensitives, and Tech/Telecom.
Reflation Trade Back In Vogue? We’d Rather Be Late Than Early
Despite recent improvement in some inflation measures, we are not convinced the war against disinflation has been won. The risk of being too early on the inflation call far outweighs the risk of being too late.
Building Products Group = Attractive
We recently purchased the Building Products group in our Select Industries Portfolio. Strong trends in existing U.S. home sales and the remodeling market, coupled with slow but steady growth in new construction, should bode well for future Building Products group performance.
Table of Contents
Stock Market
- MTI Now Bullish, But Doubts Linger
- Sizing Up The Rally
- An Alarming 2008 Analogy?
- “Four On The Floor”
- Small Caps: The P/E Premium Lives On…
- Xenophobia Gone Too Far?
- Valuations: The Correction That Never Was
- Thoughts On The Commodity Bounce
- Sell In May: Statistical Update
- EM: Improved Sentiment But Macro Risks Still Dominate
Of Special Interest
Macro Monitor
- Reflation Trade Back In Vogue? We’d Rather Be Late Than Early
- Risk Aversion Index—Stayed On “Lower Risk” Signal
- US Bonds
Equity Strategies
Quant
Market Internals
Portfolios
- Core & Global Asset Allocation Portfolios
- Domestic & Global Long-Only Portfolios
- 100% Short Portfolio: AdvantHedge
Major Trend
Estimating the Downside
At Random
Major Trend Moved Into Moderately Bullish Zone
Riding a major upswing in the Momentum/Breadth/Divergence category, the MTI moved to positive for the first time in almost 10-months. Tactical Funds’ net equity exposure increased to near 55%.
Small Caps: The P/E Premium Lives On…
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.
Sell In May: Statistical Update
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.
Profit Margins At The Sector Level
S&P 500 profit margins mask the disparate trends taking place on a sectoral level. We dissect those trends with the ten major sectors grouped by five broad themes: Cyclicals, Commodities, Defensives, Interest Sensitives, and Tech/Telecom.
Reflation Trade Back In Vogue? We’d Rather Be Late Than Early
Despite recent improvement in some inflation measures, we are not convinced the war against disinflation has been won. The risk of being too early on the inflation call far outweighs the risk of being too late.
Building Products Group = Attractive
We recently purchased the Building Products group in our Select Industries Portfolio. Strong trends in existing U.S. home sales and the remodeling market, coupled with slow but steady growth in new construction, should bode well for future Building Products group performance.
Stock Market
- MTI Now Bullish, But Doubts Linger
- Sizing Up The Rally
- An Alarming 2008 Analogy?
- “Four On The Floor”
- Small Caps: The P/E Premium Lives On…
- Xenophobia Gone Too Far?
- Valuations: The Correction That Never Was
- Thoughts On The Commodity Bounce
- Sell In May: Statistical Update
- EM: Improved Sentiment But Macro Risks Still Dominate
Of Special Interest
Macro Monitor
- Reflation Trade Back In Vogue? We’d Rather Be Late Than Early
- Risk Aversion Index—Stayed On “Lower Risk” Signal
- US Bonds
Equity Strategies
Quant
Market Internals
Portfolios
- Core & Global Asset Allocation Portfolios
- Domestic & Global Long-Only Portfolios
- 100% Short Portfolio: AdvantHedge
Major Trend
Estimating the Downside
At Random
Perception for the Professional
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