Inside The Stock Market ...trends, cross-currents, and outlook
Rising Interest Rates Don’t Prohibit Rising Stock Prices
Expect stock prices and interest rates to move higher together for a while. There are plenty of examples of this historically...although some of them go waaayyyy back.
Thoughts On China Investing: Domestic Consumption Versus Infrastructure Play
Jun Zhu makes a compelling case for focusing China equity exposure on consumer stocks. Increases in bank “Required Reserves” mandated by China government will have greater impact on Infrastructure stocks, while consumerism is still being supported and encouraged.
Popularity, Agreement, And Trust: A Global Perspective Of Investor Preference
Analysts are playing an increasingly important role in today’s market. In this section, we focus on the market’s interpretation of three characteristics related to analysts estimates: Popularity, Agreement, and Trust.
First Year In The Books… And Still Bullish
Global bull market is now one year old. U.S. stocks are probably in fair value territory, but should move to moderately overvalued territory as both the economy and investor sentiment improve.
Giving Bonds Short Shrift
At the end of November, The Leuthold Group established a 7% short position in long-term Treasury bonds across all tactical asset allocation funds (Core, Asset Allocation and Global). We view this as a longer-term position.
Commodities… And The “Old Normal”?
A loss in leadership by commodity-oriented stocks could be the big surprise for 2010. Commodity sentiment is elevated, and the sector should feel the after-effects of a capacity building binge from late last decade. Rising inflation—if it’s the monetary debasement variety—won’t lift the sector.
What Keeps Us Up At Night
We consider it incredible that most of the leading economic indicators have staged such traditional V-shaped rebounds with virtually no boost from the housing sector.
Rising Inflation: Not Always Bad For Stocks… Especially Small Caps
A look at stock performance in various inflation environments would seem to predict below average performance in 2009, but threat of monetary debasement inflation in 2011 and beyond could set the stage for poor performance.
Liquidity Drying Up… Some Trends Worth Watching
Our broad read of the stock market is still bullish, but we can’t help noticing that the concerted effort to supercharge the economy via liquidity may be losing some steam.
A Global Perspective: Investor Preference For Earnings And Revenue Risks
A look at earnings and revenue risk to see how the market reveals its preference.
Despite January, Big Picture Still Bullish
Don’t think we’ve seen a cyclical top, because that would mean everything essentially topped at the same time. Breadth has yet to peak in this cycle and that is one reason we expect the market to move higher over the near term.
The “New Normal”: Yes, They Ring A Bell At The Bottom
The “New Normal”, just like the late 1990’s “New Era”, will likely fade from popular jargon over time. Counter to “New Normal” reasoning, the Consumer Discretionary sector has demonstrated remarkable performance.
Large Cap Versus Small Cap: Performance Parity 1979 To Date
Over this entire period, the S&P has narrowly beaten the Russell 2000, but not by much.
2009: Not Monotony, But Close
The 2008 worst performers shot to the head of the class in 2009. History however shows it doesn’t usually pay to buy the prior year’s laggards in hopes of hitting it big the next year.
2009 Dreams And Nightmares...A Look Back At What Might Have Been
Based on loud bearish complaints about the “junk rally”—and our commentary on the Revenge-of-the-Nerds (anti-momentum) effect—it should come as no surprise that 2009 marked the most dramatic reversal of industry leadership we have seen in our twenty-plus years of tracking this work.
Equity Fund Flow Trends In 2009… Emerging Markets Is Where It’s At
In 2009, Main Street investors continued to pull money out of U.S. focus equity mutual funds. There were some equity funds that they did embrace…specifically Emerging Country funds.
A Global Perspective On Investor Preference For Top-Line Growth Or Bottom-Line Growth
A look at how the market reveals its preference for the top-line growth (revenue growth) vs. the bottom-line growth (EPS growth).
Our Outlook For 2019 (...2010 To Come Later)
While most are content to make annual predictions at this time, leave it to Doug Ramsey to bite off an even bigger piece…predicting the next DECADE.
Quant Review 2009…. Value Reigns
Review of quant strategies shows momentum out of favor in 2009, with value factors working best.
Asset Allocation: Still Heavy In Equities
Initial outlook for 2010 is to see the S&P 500 rise to 1300 or 1350 during the first half of the year but then give up those gains in the second half of the year. We are counting on the Major Trend Index to help navigate the choppy market.
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