Green Book October 2023
Pause, Or Paws?
The one-year anniversary of the 2022 bear-market low occurs on October 12th, yet—after all this time—we’re not confident enough to declare it as the bull’s first birthday.
We’re interested to see whether or not CBNC breaks out new baseball caps for the occasion, as they did in the late 1990s for “Dow 10,000.”
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Featured Articles
Has The Tsunami Of Stimulus Been Worth It?
Federal outlays, federal debt, and M2 have each jumped ~50% in five years, while the Fed’s balance sheet soared by 90%. The “reward”: Real GDP cumulative growth per capita of 1.6% per year (a good chunk of which will be reversed during a recession).
Equity Duration Risk—Going The Wrong Way For The Magnificent Seven
Typically, duration contracts when rates go up, all else equal. The Magnificent Seven, however, saw their duration going the wrong way: They seem to be the only cohort to see duration lengthening and are now more risky than a year ago.
Research Preview: Show Me The Mo’
In a year when the Magnificent Seven has epitomized the concept of price momentum, investors who spotted that phenomenon and employed a momentum ETF to capitalize on the trend were not rewarded: Owning MTUM or SPMO not only forewent the tech titan rally, they both badly lagged the S&P 500.
Yelling “Fire” In A Crowded Theater?
The latest market down-leg triggered one of our short-term breadth oscillators into super-oversold territory. While “oversold” may sound bullish to most contrarians, when SPX becomes as internally weak on a 10-day basis as it did in early October, there’s usually another shoe to drop.
Factor Tilt Regime—October 2023
The dominating and overwhelming gains by the Magnificent Seven have made it nearly impossible for most traditional equity factors to excel. Only two styles have managed to surpass the S&P 500’s YTD return: Growth and Quality—and both have healthy exposures to the Magnificent Seven.
Select Industries Moves Back Into Energy
Oil & Gas Equipment & Services was purchased for the Select Industries portfolio last month, re-establishing exposure to what was our largest overweight entering 2023. The sector leapt from #11 to #4 in the ranks on the back of improved sentiment and macro readings.
Table of Contents
Stock Market
- Pause, Or Paws?
- Feeble Bull Or Hibernating Bear?
- Yelling “Fire” In A Crowded Theater?
- Groupthink?
- Yields Up, Economy Down?
- Has The Tsunami Of Stimulus Been Worth It?
- Can The Treasury Afford A Recessionary Bear?
- The Small-Cap Year That Wasn’t
- TINA: Gone, But Not Forgotten
- Multi-Asset Madness
Of Special Interest
Macro Monitor
- Equity Duration Risk—Going The Wrong Way For The Magnificent Seven
- Risk Aversion Index: Stayed On “Lower-Risk” Signal
The Leuthold Refresh
Equity Strategies
Quant
Market Internals
- Late Cycle Lingers
- Small Cap vs Mid Cap vs Large Cap
- Growth vs Value vs Cyclicals
- Additional Factors
Portfolios
Major Trend
Estimating the Downside
At Random
Has The Tsunami Of Stimulus Been Worth It?
Federal outlays, federal debt, and M2 have each jumped ~50% in five years, while the Fed’s balance sheet soared by 90%. The “reward”: Real GDP cumulative growth per capita of 1.6% per year (a good chunk of which will be reversed during a recession).
Equity Duration Risk—Going The Wrong Way For The Magnificent Seven
Typically, duration contracts when rates go up, all else equal. The Magnificent Seven, however, saw their duration going the wrong way: They seem to be the only cohort to see duration lengthening and are now more risky than a year ago.
Research Preview: Show Me The Mo’
In a year when the Magnificent Seven has epitomized the concept of price momentum, investors who spotted that phenomenon and employed a momentum ETF to capitalize on the trend were not rewarded: Owning MTUM or SPMO not only forewent the tech titan rally, they both badly lagged the S&P 500.
Yelling “Fire” In A Crowded Theater?
The latest market down-leg triggered one of our short-term breadth oscillators into super-oversold territory. While “oversold” may sound bullish to most contrarians, when SPX becomes as internally weak on a 10-day basis as it did in early October, there’s usually another shoe to drop.
Factor Tilt Regime—October 2023
The dominating and overwhelming gains by the Magnificent Seven have made it nearly impossible for most traditional equity factors to excel. Only two styles have managed to surpass the S&P 500’s YTD return: Growth and Quality—and both have healthy exposures to the Magnificent Seven.
Select Industries Moves Back Into Energy
Oil & Gas Equipment & Services was purchased for the Select Industries portfolio last month, re-establishing exposure to what was our largest overweight entering 2023. The sector leapt from #11 to #4 in the ranks on the back of improved sentiment and macro readings.
Stock Market
- Pause, Or Paws?
- Feeble Bull Or Hibernating Bear?
- Yelling “Fire” In A Crowded Theater?
- Groupthink?
- Yields Up, Economy Down?
- Has The Tsunami Of Stimulus Been Worth It?
- Can The Treasury Afford A Recessionary Bear?
- The Small-Cap Year That Wasn’t
- TINA: Gone, But Not Forgotten
- Multi-Asset Madness
Of Special Interest
Macro Monitor
- Equity Duration Risk—Going The Wrong Way For The Magnificent Seven
- Risk Aversion Index: Stayed On “Lower-Risk” Signal
The Leuthold Refresh
Equity Strategies
Quant
Market Internals
- Late Cycle Lingers
- Small Cap vs Mid Cap vs Large Cap
- Growth vs Value vs Cyclicals
- Additional Factors
Portfolios
Major Trend
Estimating the Downside
At Random
Perception for the Professional
March 2026 Issue
Featured Articles
Sector Navigator
March 2026 Issue
