Green Book June 2017
A “Measured” Melt-Up
The stock market “melt up” scenario is underway but has proven less broad than we expected. Just as in the late-1990s, Technology and NASDAQ are the main subjects of investor adulation.
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Featured Articles
A “Measured” Melt-Up
The stock market “melt up” scenario is underway but has proven less broad than we expected. Just as in the late-1990s, Technology and NASDAQ are the main subjects of investor adulation.
Stock Market Observations
After a two-month lull, stock market momentum reasserted itself in May bringing our summer S&P 500 target of 2,600 back into focus… Meanwhile, we’ve fielded several media calls about the “FANG” stocks’ large contribution to some YTD returns—but that doesn’t diminish the new highs being made elsewhere by disparate groups… NYSE Weekly A/D Line and New Highs/Lows figures also suggest the stock market isn’t yet top-heavy enough to tip over.
A Contrarian “Late-Cycle” Play?
The Amazon Effect masks both the underperformance of the average Discretionary stock and the relative value that’s been reestablished across the sector. “Discretionary ex-Amazon” is a better contrarian pick than Energy.
Dynamic Factor Investing: A Study In Value
Investment factors experience performance cycles just like every other asset and index. The Value factor is robust across definitions, as all eight versions produced positive excess returns under long/short and long-only methodologies.
Goldilocks—Enjoy It While It Lasts
The best interpretation of the current cross-asset message is the scenario of goldilocks, and there are reasons to believe this is a possible scenario for the near term.
Emerging Markets: Fundamental Diffusion Indicators
Within EM, more robust growth is being exhibited by: 1) firms in Emerging Europe; 2) companies in Energy, Materials, and Financials; and, 3) larger cap companies.
YTD Fund Inflow Remains Highest Since 2013
Excluding money market, all equity and bond fund categories have captured cumulative net cash inflow that is more than five times the level seen at this time last year. ETF inflow this year has accounted for nearly 80% of all flows.
Table of Contents
Stock Market
- A “Measured” Melt-Up
- Stock Market Observations
- Stocks Versus Bonds: A Lonnngggg-Term View
- Need More Reasons To Buy?
- Inflation Complacency?
- Technology: What A Long, Strange Trip It’s Been
- A Contrarian “Late-Cycle” Play?
- Energy: Too Early To Bottom Fish
- Emerging Markets: Fundamental Diffusion Indicators
- MSCI EM Reclassification: Achiever & Aspirers
Of Special Interest
Macro Monitor
Equity Strategies
Quant
Market Internals
Portfolios
Major Trend
Fund Flow Trends
Estimating the Downside
At Random
A “Measured” Melt-Up
The stock market “melt up” scenario is underway but has proven less broad than we expected. Just as in the late-1990s, Technology and NASDAQ are the main subjects of investor adulation.
Stock Market Observations
After a two-month lull, stock market momentum reasserted itself in May bringing our summer S&P 500 target of 2,600 back into focus… Meanwhile, we’ve fielded several media calls about the “FANG” stocks’ large contribution to some YTD returns—but that doesn’t diminish the new highs being made elsewhere by disparate groups… NYSE Weekly A/D Line and New Highs/Lows figures also suggest the stock market isn’t yet top-heavy enough to tip over.
A Contrarian “Late-Cycle” Play?
The Amazon Effect masks both the underperformance of the average Discretionary stock and the relative value that’s been reestablished across the sector. “Discretionary ex-Amazon” is a better contrarian pick than Energy.
Dynamic Factor Investing: A Study In Value
Investment factors experience performance cycles just like every other asset and index. The Value factor is robust across definitions, as all eight versions produced positive excess returns under long/short and long-only methodologies.
Goldilocks—Enjoy It While It Lasts
The best interpretation of the current cross-asset message is the scenario of goldilocks, and there are reasons to believe this is a possible scenario for the near term.
Emerging Markets: Fundamental Diffusion Indicators
Within EM, more robust growth is being exhibited by: 1) firms in Emerging Europe; 2) companies in Energy, Materials, and Financials; and, 3) larger cap companies.
YTD Fund Inflow Remains Highest Since 2013
Excluding money market, all equity and bond fund categories have captured cumulative net cash inflow that is more than five times the level seen at this time last year. ETF inflow this year has accounted for nearly 80% of all flows.
Stock Market
- A “Measured” Melt-Up
- Stock Market Observations
- Stocks Versus Bonds: A Lonnngggg-Term View
- Need More Reasons To Buy?
- Inflation Complacency?
- Technology: What A Long, Strange Trip It’s Been
- A Contrarian “Late-Cycle” Play?
- Energy: Too Early To Bottom Fish
- Emerging Markets: Fundamental Diffusion Indicators
- MSCI EM Reclassification: Achiever & Aspirers
Of Special Interest
Macro Monitor
Equity Strategies
Quant
Market Internals
Portfolios
Major Trend
Fund Flow Trends
Estimating the Downside
At Random
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