Green Book May 2024
Peeking Ahead To November?
The stock market seems to relish the headlines it believes we’ll be reading three- to six-months from now. At the end of that window, of course, is the presidential election, and it’s impossible for us to see an outcome that doesn’t deepen the partisan chasm.
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Featured Articles
The Bull Vs. Historical Peers
Now at the bull market’s one-and-a-half-year mark, it’s notable that every major stock index has trailed the average path for a new bull market at this point in a cycle. But, it’s unfair to liken today’s bull with past bulls, because it has a unique adverse trait that is apt to be life-shortening: It arose during an economic expansion—and likely in the latter stages, considering the unemployment rate was 3.5%.
Surprising Strength For Active
Despite a hostile setting for active management in Q1, six of nine style boxes in our ongoing analysis achieved active-fund win rates above 50% (60% on average bested their passive benchmark). The other three each scored just below 50% of active strategies beating passive. This is remarkable given the proven importance of market conditions in the active/passive performance derby.
Why The Long Faces?
Despite our reservations about the durability of the expansion, we have to respect what it has overcome: interest-rate hikes of 425 bps; a nearly 2-year runoff in the Fed’s balance sheet (QT); and a 9-month bear market that began before the expansion reached its 2-year milestone. Even consumer “expectations,” which track the market higher in the early phase of a bull market, never rebounded and are lower now than at the fall-2022 market low.
$Yen No Mountain High Enough?
One casualty of the U.S. market’s hawkish turn is the Japanese Yen. It certainly grabbed its share of headlines, yet, when viewing the selloff in historical perspective, this year’s uptick looks entirely inconsequential. Additionally, when considering the Yen through the lens of other Asian currencies, its outsized weakness versus the dollar essentially disappears. Dollar strength is the real driver and it has pummeled Asian currencies across the board.
Table of Contents
Stock Market
- Peeking Ahead To November?
- Why The Long Faces?
- The Bull Vs. Historical Peers
- Are Prices Impeding A Factory Recovery?
- Are Prices Impeding Recoveries Elsewhere?
- Powell Could Pull Off A Rare Feat
- Bubble “Resistance” Proves Formidable
- Too Calm For Comfort?
- Technical Tidbits
Of Special Interest
Macro Monitor
The Leuthold Refresh
Equity Strategies
Quant
Market Internals
- Recession-Like Figures Continue
- Small Cap vs Mid Cap vs Large Cap
- Growth vs Value vs Cyclicals
- Additional Factors
Portfolios
Major Trend
Estimating the Downside
At Random
The Bull Vs. Historical Peers
Now at the bull market’s one-and-a-half-year mark, it’s notable that every major stock index has trailed the average path for a new bull market at this point in a cycle. But, it’s unfair to liken today’s bull with past bulls, because it has a unique adverse trait that is apt to be life-shortening: It arose during an economic expansion—and likely in the latter stages, considering the unemployment rate was 3.5%.
Surprising Strength For Active
Despite a hostile setting for active management in Q1, six of nine style boxes in our ongoing analysis achieved active-fund win rates above 50% (60% on average bested their passive benchmark). The other three each scored just below 50% of active strategies beating passive. This is remarkable given the proven importance of market conditions in the active/passive performance derby.
Why The Long Faces?
Despite our reservations about the durability of the expansion, we have to respect what it has overcome: interest-rate hikes of 425 bps; a nearly 2-year runoff in the Fed’s balance sheet (QT); and a 9-month bear market that began before the expansion reached its 2-year milestone. Even consumer “expectations,” which track the market higher in the early phase of a bull market, never rebounded and are lower now than at the fall-2022 market low.
$Yen No Mountain High Enough?
One casualty of the U.S. market’s hawkish turn is the Japanese Yen. It certainly grabbed its share of headlines, yet, when viewing the selloff in historical perspective, this year’s uptick looks entirely inconsequential. Additionally, when considering the Yen through the lens of other Asian currencies, its outsized weakness versus the dollar essentially disappears. Dollar strength is the real driver and it has pummeled Asian currencies across the board.
Stock Market
- Peeking Ahead To November?
- Why The Long Faces?
- The Bull Vs. Historical Peers
- Are Prices Impeding A Factory Recovery?
- Are Prices Impeding Recoveries Elsewhere?
- Powell Could Pull Off A Rare Feat
- Bubble “Resistance” Proves Formidable
- Too Calm For Comfort?
- Technical Tidbits
Of Special Interest
Macro Monitor
The Leuthold Refresh
Equity Strategies
Quant
Market Internals
- Recession-Like Figures Continue
- 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
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Sector Navigator
March 2026 Issue
