Green Book January 2025
Smarter Than A Fifth-Grader?
A year ago, we wrote “We’re not as cautious on the stock market as we should be, because it is going up.” We’d never make such a silly argument to a fifth-grader, but we somehow felt it appropriate to share that rationale with our audience of seasoned market professionals.
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Featured Articles
A 25-Year Bubble-versary
Commemorating the Y2K Tech bubble today is not necessarily premature, since December 1999 was the valuation peak of that bubble—and indeed of all U.S. stock market history. Buying the S&P 500 at the end of the last century might therefore be considered the worst-timed stock market entry ever.
2025 Time Cycles—Nothing To Worry About?
Overall, most patterns suggest a decent year for global equity markets. Expectations are already very high, though, and that leaves much less room for error. We strongly caution against extrapolating U.S. equities’ 2024 performance into 2025.
A 2024 Technical Retrospective
One can’t blame the stock market for not hinting that 2024 was going to be a barn burner. It did. On January 2, 2024, a critical “breadth-thrust” signal was triggered and, true to historical form, SPX delivered a 20%-plus gain through the next twelve months. Notably, an impressive aspect of the breadth-thrust track record remains intact: The index has never registered a 12-month loss after any these signals.
2024 Asset Allocation Recap
In the theme that’s reminiscent of all but a few of the last 16 years, the optimal strategy for equity managers and asset allocators in 2024 was the same: Buy the S&P 500, and then hit the links. There is statistical support for doing exactly same thing in 2025.
Factor Tilt Update
Our previous update reported that eight of ten factors outperformed the S&P 500, leading us to hope that maybe, just maybe, the market was broadening out from its narrow focus on mega-cap growth. Those hopes were dashed in the fourth quarter, as only two of ten factors managed to outperform the index.
Leuthold’s Industry Group “Dreams” And “Nightmares”—Annual Update
Over the entire history of this study, the momentum plays of our “Dreams” and “Nightmares” have worked both ways. Like everything else, our Dreams fell short of the Cap Weighted S&P 500 in 2024. However, the spread of Dreams over the Nightmares was fairly impressive.
2024 Factor Performance
Momentum was the best performing factor for 2024 - and it wasn’t really close. Growth continued to perform better within large caps compared to small caps. Sentiment and growth were also positive while, no surprise, value was negative again.
Table of Contents
Stock Market
- Smarter Than A Fifth-Grader?
- Deciphering The Move In Yields
- Labor Market Oddities
- A 2024 Technical Retrospective
- A 25-Year Bubble-versary
- Sentiment: Frothier For Longer
- Trickery With Relative Valuations
- Time Cycles For 2025: A Mixed Message
- A 2025 Forecast From 150 Years Ago!
- 2024 Asset Allocation Recap
Of Special Interest
Macro Monitor
- Top Charts Of 2024—Persistent Themes For 2025
- 2025 Time Cycles—Nothing To Worry About?
- Risk Aversion Index: A New “Higher-Risk” Signal
The Leuthold Refresh
Equity Strategies
- Leuthold Portfolios Update - December 2024
- Leuthold’s Industry Group “Dreams” And “Nightmares”—Annual Update
Quant
Market Internals
- Trend Still Positive
- Valuations: Small Cap Vs. Large Cap
- Leadership Dynamics: Growth/Value/Cyclical
- Other Market Undercurrents
Portfolios
Major Trend
Estimating the Downside
At Random
A 25-Year Bubble-versary
Commemorating the Y2K Tech bubble today is not necessarily premature, since December 1999 was the valuation peak of that bubble—and indeed of all U.S. stock market history. Buying the S&P 500 at the end of the last century might therefore be considered the worst-timed stock market entry ever.
2025 Time Cycles—Nothing To Worry About?
Overall, most patterns suggest a decent year for global equity markets. Expectations are already very high, though, and that leaves much less room for error. We strongly caution against extrapolating U.S. equities’ 2024 performance into 2025.
A 2024 Technical Retrospective
One can’t blame the stock market for not hinting that 2024 was going to be a barn burner. It did. On January 2, 2024, a critical “breadth-thrust” signal was triggered and, true to historical form, SPX delivered a 20%-plus gain through the next twelve months. Notably, an impressive aspect of the breadth-thrust track record remains intact: The index has never registered a 12-month loss after any these signals.
2024 Asset Allocation Recap
In the theme that’s reminiscent of all but a few of the last 16 years, the optimal strategy for equity managers and asset allocators in 2024 was the same: Buy the S&P 500, and then hit the links. There is statistical support for doing exactly same thing in 2025.
Factor Tilt Update
Our previous update reported that eight of ten factors outperformed the S&P 500, leading us to hope that maybe, just maybe, the market was broadening out from its narrow focus on mega-cap growth. Those hopes were dashed in the fourth quarter, as only two of ten factors managed to outperform the index.
Leuthold’s Industry Group “Dreams” And “Nightmares”—Annual Update
Over the entire history of this study, the momentum plays of our “Dreams” and “Nightmares” have worked both ways. Like everything else, our Dreams fell short of the Cap Weighted S&P 500 in 2024. However, the spread of Dreams over the Nightmares was fairly impressive.
2024 Factor Performance
Momentum was the best performing factor for 2024 - and it wasn’t really close. Growth continued to perform better within large caps compared to small caps. Sentiment and growth were also positive while, no surprise, value was negative again.
Stock Market
- Smarter Than A Fifth-Grader?
- Deciphering The Move In Yields
- Labor Market Oddities
- A 2024 Technical Retrospective
- A 25-Year Bubble-versary
- Sentiment: Frothier For Longer
- Trickery With Relative Valuations
- Time Cycles For 2025: A Mixed Message
- A 2025 Forecast From 150 Years Ago!
- 2024 Asset Allocation Recap
Of Special Interest
Macro Monitor
- Top Charts Of 2024—Persistent Themes For 2025
- 2025 Time Cycles—Nothing To Worry About?
- Risk Aversion Index: A New “Higher-Risk” Signal
The Leuthold Refresh
Equity Strategies
- Leuthold Portfolios Update - December 2024
- Leuthold’s Industry Group “Dreams” And “Nightmares”—Annual Update
Quant
Market Internals
- Trend Still Positive
- Valuations: Small Cap Vs. Large Cap
- Leadership Dynamics: Growth/Value/Cyclical
- Other Market Undercurrents
Portfolios
Major Trend
Estimating the Downside
At Random
Perception for the Professional
March 2026 Issue
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March 2026 Issue
