Green Book November 2021
Aging Prematurely
Regardless of one’s view on the maturity of today’s economic and market cycles, it’s hard to deny that the continuation of extraordinarily-loose economic policies is now causing those cycles to age prematurely. And no doubt it’s contributing to the premature “graying” of many market participants.
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Featured Articles
Aging Prematurely
Regardless of one’s view on the maturity of today’s economic and market cycles, it’s hard to deny that the continuation of extraordinarily-loose economic policies is now causing those cycles to age prematurely. And no doubt it’s contributing to the premature “graying” of many market participants.
“Into The Weeds” With Normalized EPS
The environment where massively above-trend federal outlays have generated massively above-trend readings in both current and projected S&P 500 EPS, the idea of normalizing EPS over a period as long as five years might seem hopelessly out of touch. But it’s during times of extraordinary conditions—both good and bad—that render this work especially valuable.
Tis The Season For Factor Tilting
Factor investing has gained wide popularity in recent years, enabled by a proliferation of smart-beta ETFs coming to market, which opened new opportunities for tactical investors. In 2018, we launched our Factor Tilt ETF strategy, and here we discuss how we’re now enhancing it by adding Seasonal Cyclicality to our analytical toolbox for evaluating factor conditions.
Energy Makes Its Move
After years of languishing in the rock bottom of Group Selection Scores and sector rankings, Energy exploded higher this month, jumping from 10th lowest (out of eleven broad sectors) to 3rd highest in our composite rankings.
It’s That Time Of Year…
October’s nearly +7% S&P 500 surge was impressive, but came a month early—according to the traditional seasonal cycle—which turned bullish on November 1st, and will remain intact for the next six months.
Fed Taper—Not A Policy Error
We believe concerns about central-bank policy error are mostly a foreign issue, because they have moved much more aggressively than the Fed. The market has shown no indication of a Fed-policy mistake and we are still on board with the reflation trade.
Manufacturing: More Citations For Speeding
It is much easier to predict inflation, itself, than to predict when investors will become traumatized by it. Some of the most helpful measures for the latter task come from the ISM Manufacturing Report. October’s readings saw three key measures above the statistical “speed limits” we calculated years ago.
Table of Contents
Stock Market
- Aging Prematurely
- No Bark, No Bite?
- The State Of The “Tape,” Before The Taper
- Manufacturing: More Citations For Speeding
- “Into The Weeds” With Normalized EPS
- A Marginal Measure Of Margins?
- It’s That Time Of Year…
- Seasonality Of A Different Sort
Of Special Interest
Macro Monitor
Equity Strategies
Market Internals
Portfolios
Major Trend
Estimating the Downside
At Random
Aging Prematurely
Regardless of one’s view on the maturity of today’s economic and market cycles, it’s hard to deny that the continuation of extraordinarily-loose economic policies is now causing those cycles to age prematurely. And no doubt it’s contributing to the premature “graying” of many market participants.
“Into The Weeds” With Normalized EPS
The environment where massively above-trend federal outlays have generated massively above-trend readings in both current and projected S&P 500 EPS, the idea of normalizing EPS over a period as long as five years might seem hopelessly out of touch. But it’s during times of extraordinary conditions—both good and bad—that render this work especially valuable.
Tis The Season For Factor Tilting
Factor investing has gained wide popularity in recent years, enabled by a proliferation of smart-beta ETFs coming to market, which opened new opportunities for tactical investors. In 2018, we launched our Factor Tilt ETF strategy, and here we discuss how we’re now enhancing it by adding Seasonal Cyclicality to our analytical toolbox for evaluating factor conditions.
Energy Makes Its Move
After years of languishing in the rock bottom of Group Selection Scores and sector rankings, Energy exploded higher this month, jumping from 10th lowest (out of eleven broad sectors) to 3rd highest in our composite rankings.
It’s That Time Of Year…
October’s nearly +7% S&P 500 surge was impressive, but came a month early—according to the traditional seasonal cycle—which turned bullish on November 1st, and will remain intact for the next six months.
Fed Taper—Not A Policy Error
We believe concerns about central-bank policy error are mostly a foreign issue, because they have moved much more aggressively than the Fed. The market has shown no indication of a Fed-policy mistake and we are still on board with the reflation trade.
Manufacturing: More Citations For Speeding
It is much easier to predict inflation, itself, than to predict when investors will become traumatized by it. Some of the most helpful measures for the latter task come from the ISM Manufacturing Report. October’s readings saw three key measures above the statistical “speed limits” we calculated years ago.
Stock Market
- Aging Prematurely
- No Bark, No Bite?
- The State Of The “Tape,” Before The Taper
- Manufacturing: More Citations For Speeding
- “Into The Weeds” With Normalized EPS
- A Marginal Measure Of Margins?
- It’s That Time Of Year…
- Seasonality Of A Different Sort
Of Special Interest
Macro Monitor
Equity Strategies
Market Internals
Portfolios
Major Trend
Estimating the Downside
At Random
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