Green Book April 2024
“Great Quarter, Guys!”
After the market just delivered investors their “birthright”—a full-year average total return of +10.5% in just a single quarter—it’s fun to imagine how a quarterly analyst call with the “management” of S&P 500, Inc. might sound.
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Featured Articles
A Hugely Productive Rally
Rallies of this magnitude (+30% in 5-6 months) are not uncommon; however, this one began one year into a yield-curve-inversion cycle and with stock valuations already elevated. The latter condition could be viewed as a positive because the market surge has created one of the most pronounced short-term wealth effects in history.
Technicals: Four On The Floor!
The market upswing is now confirmed by Cyclicals, Defensives, Breadth, and Bonds. Endorsement by all four occurs about one-third of the time and has led to an S&P 500 average annualized compound return of +15%.
First BoJ Rate Hike In 17 Years—Not So Virtuous After All
To gauge how much faith we should have in this “virtuous” cycle, we examine the macro context in terms of the business cycle, the Yen, interest rates, and inflation. Ultimately, inflation holds the key to bond yields, as the main difference between pre- and post-1990 rate hikes boils down to inflation—which is also the key determinant of how far the BoJ can go in this tightening cycle.
Implications Of A Great First Quarter
Realizing a gain in each of the first three months of the year, like Q124, is not as bullish for the next twelve months as are back-to-back gains in January and February. The three-month streak produces a one-year performance advantage of around 2%, while a string of Jan-Feb gains was additive by 900 bps.
Research Preview: Staples’ Valuation
Well-respected analysts have been espousing different views on the Staples sector’s overall valuation. Some argue Staples is rather richly priced, while others believe it is a bargain in the making. Disagreement creates opportunities, and we believe a closer look at Staples is in order.
Factor Tilt Update
This month’s Leuthold Refresh is a quarterly update on our factor regime analysis. Factors, or investment styles, have historically performed quite differently under various economic and market conditions, and we’ve mapped these relationships to identify the factors best positioned for the environment at this time.
Table of Contents
Stock Market
- “Great Quarter, Guys!”
- Steve’s Sagacious Advice
- A Hugely Productive Rally
- Stock Price “Seepage?”
- Bubble Or No Bubble?
- What It Will Take To Earn “Average” Returns
- Too Soon To Ditch The LEI
- Profits: Give Credit Where It’s Due
- In Hindsight, It Was Obvious!
- Implications Of A Great First Quarter
- Technicals: Four On The Floor!
Of Special Interest
Macro Monitor
- First BoJ Rate Hike In 17 Years—Not So Virtuous After All
- Risk Aversion Index: Stayed On “Lower-Risk” Signal
The Leuthold Refresh
Equity Strategies
Market Internals
- Two Years Underground
- Small Cap vs Mid Cap vs Large Cap
- Growth vs Value vs Cyclicals
- Additional Factors
Portfolios
Major Trend
Estimating the Downside
At Random
A Hugely Productive Rally
Rallies of this magnitude (+30% in 5-6 months) are not uncommon; however, this one began one year into a yield-curve-inversion cycle and with stock valuations already elevated. The latter condition could be viewed as a positive because the market surge has created one of the most pronounced short-term wealth effects in history.
Technicals: Four On The Floor!
The market upswing is now confirmed by Cyclicals, Defensives, Breadth, and Bonds. Endorsement by all four occurs about one-third of the time and has led to an S&P 500 average annualized compound return of +15%.
First BoJ Rate Hike In 17 Years—Not So Virtuous After All
To gauge how much faith we should have in this “virtuous” cycle, we examine the macro context in terms of the business cycle, the Yen, interest rates, and inflation. Ultimately, inflation holds the key to bond yields, as the main difference between pre- and post-1990 rate hikes boils down to inflation—which is also the key determinant of how far the BoJ can go in this tightening cycle.
Implications Of A Great First Quarter
Realizing a gain in each of the first three months of the year, like Q124, is not as bullish for the next twelve months as are back-to-back gains in January and February. The three-month streak produces a one-year performance advantage of around 2%, while a string of Jan-Feb gains was additive by 900 bps.
Research Preview: Staples’ Valuation
Well-respected analysts have been espousing different views on the Staples sector’s overall valuation. Some argue Staples is rather richly priced, while others believe it is a bargain in the making. Disagreement creates opportunities, and we believe a closer look at Staples is in order.
Factor Tilt Update
This month’s Leuthold Refresh is a quarterly update on our factor regime analysis. Factors, or investment styles, have historically performed quite differently under various economic and market conditions, and we’ve mapped these relationships to identify the factors best positioned for the environment at this time.
Stock Market
- “Great Quarter, Guys!”
- Steve’s Sagacious Advice
- A Hugely Productive Rally
- Stock Price “Seepage?”
- Bubble Or No Bubble?
- What It Will Take To Earn “Average” Returns
- Too Soon To Ditch The LEI
- Profits: Give Credit Where It’s Due
- In Hindsight, It Was Obvious!
- Implications Of A Great First Quarter
- Technicals: Four On The Floor!
Of Special Interest
Macro Monitor
- First BoJ Rate Hike In 17 Years—Not So Virtuous After All
- Risk Aversion Index: Stayed On “Lower-Risk” Signal
The Leuthold Refresh
Equity Strategies
Market Internals
- Two Years Underground
- 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
