Green Book March 2024
Bubbling Up?
We are not sure whether the stock market’s upswing has reached an altitude that qualifies as “bubbly.” Based on numerous measures, the S&P 500 looks dangerously close.
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Broader Than It Looks?
Breadth and leadership of this bull market have fallen short of the typical patterns of early-cycle bulls, even if contrasted only to other new bulls that did not emerge from recessionary lows, like 1962-66 and 1987-90. Still, participation looks broad enough that the odds are against an imminent cyclical peak.
Narrower Than It Looks?
It’s been 26 months since the all-time peaks the NYSE Weekly and Daily Advance/Declines Lines. The weakness in the Daily version is especially troublesome given the strong upward bias it’s exhbited since 2001. In addition, figures for 52-Wk. New Highs and New Lows have been anemic relative to the major index gains—especially among NASDAQ stocks.
The Inversion: Forgotten, But Not Gone
Mentions of the yield curve by the financial media and market pundits have plummeted the last few months. That’s understandable, but dangerous. We remember the same happening in 2007—with one of the more memorable dismissals coming from Fed Chair Bernanke.
2024 Factor Performance
Factor performance was decidedly risk-on in February. Through month end, high-momentum names have outperformed the universe by 6.7%—we have to go back to the Tech Bubble to find a year when momentum had a stronger start.
Bank Lending & Wealth Effect Support U.S. Economic Resilience
Improvement in bank lending trends should be a tailwind for economic activity, while steeper yield curves also imply a looser lending environment lies ahead. Another area supporting U.S. economic resilience is the wealth effect: The surging wealth effect is boosting consumer confidence which, in turn, leads to higher consumption.
Research Preview: Lost In Translation?
We are curious if factor ETFs have provided downside protection in recent years’ selloffs or whether their defensive nature, shown by academic studies, is lost in the translation to live-money portfolios.
Table of Contents
Stock Market
- Bubbling Up?
- The Ghost Of Bubbles Past
- Stocks “Inoculating” The Economy?
- The Inversion: Forgotten, But Not Gone
- “J” Giveth And “J” Taketh Away
- Which “New Highs” Are They Talking About?
- Bettering An Old Barometer
- Broader Than It Looks?
- Narrower Than It Looks?
Of Special Interest
Macro Monitor
- Bank Lending & Wealth Effect Support U.S. Economic Resilience
- Risk Aversion Index: Stayed On “Lower-Risk” Signal
The Leuthold Refresh
Equity Strategies
Quant
Market Internals
- From Abysmal To Awful
- Small Cap vs Mid Cap vs Large Cap
- Growth vs Value vs Cyclicals
- Additional Factors
Major Trend
Estimating the Downside
At Random
Broader Than It Looks?
Breadth and leadership of this bull market have fallen short of the typical patterns of early-cycle bulls, even if contrasted only to other new bulls that did not emerge from recessionary lows, like 1962-66 and 1987-90. Still, participation looks broad enough that the odds are against an imminent cyclical peak.
Narrower Than It Looks?
It’s been 26 months since the all-time peaks the NYSE Weekly and Daily Advance/Declines Lines. The weakness in the Daily version is especially troublesome given the strong upward bias it’s exhbited since 2001. In addition, figures for 52-Wk. New Highs and New Lows have been anemic relative to the major index gains—especially among NASDAQ stocks.
The Inversion: Forgotten, But Not Gone
Mentions of the yield curve by the financial media and market pundits have plummeted the last few months. That’s understandable, but dangerous. We remember the same happening in 2007—with one of the more memorable dismissals coming from Fed Chair Bernanke.
2024 Factor Performance
Factor performance was decidedly risk-on in February. Through month end, high-momentum names have outperformed the universe by 6.7%—we have to go back to the Tech Bubble to find a year when momentum had a stronger start.
Bank Lending & Wealth Effect Support U.S. Economic Resilience
Improvement in bank lending trends should be a tailwind for economic activity, while steeper yield curves also imply a looser lending environment lies ahead. Another area supporting U.S. economic resilience is the wealth effect: The surging wealth effect is boosting consumer confidence which, in turn, leads to higher consumption.
Research Preview: Lost In Translation?
We are curious if factor ETFs have provided downside protection in recent years’ selloffs or whether their defensive nature, shown by academic studies, is lost in the translation to live-money portfolios.
Stock Market
- Bubbling Up?
- The Ghost Of Bubbles Past
- Stocks “Inoculating” The Economy?
- The Inversion: Forgotten, But Not Gone
- “J” Giveth And “J” Taketh Away
- Which “New Highs” Are They Talking About?
- Bettering An Old Barometer
- Broader Than It Looks?
- Narrower Than It Looks?
Of Special Interest
Macro Monitor
- Bank Lending & Wealth Effect Support U.S. Economic Resilience
- Risk Aversion Index: Stayed On “Lower-Risk” Signal
The Leuthold Refresh
Equity Strategies
Quant
Market Internals
- From Abysmal To Awful
- Small Cap vs Mid Cap vs Large Cap
- Growth vs Value vs Cyclicals
- Additional Factors
Major Trend
Estimating the Downside
At Random
Perception for the Professional
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