Inside The Stock Market ...trends, cross-currents, and outlook
The Major Trend Index...Gone Global
Comparing and contrasting our traditional Major Trend Index and the Global Major Trend Index. Both are now Neutral, but the Global version is showing better valuations and worse technical scores.
Small Caps Succumbing
Why have Small Caps been outperforming Large Caps since January?
Stock Market In High Inflation Environments
High Inflation typically is NOT a good environment for stocks, but we don’t believe the CPI will move to the “high” inflation environment.
Busting Up Bubble Talk
More bubble talk. Crude oil prices are following the same pattern as the tech bubble in the late 1990s. However, Energy stocks have not become nearly as extended as Tech stocks were in the late 1990s. Also, Energy stocks have shown far superior earnings growth compared to Tech.
May Market Action
The stock market continued to move higher in May, with small and mid cap stocks outperforming the majority of large cap indices.
Stock Market Cheap! ...According To NIPA Profits
Based on NIPA Corporate Profits, the S&P 500 is now relatively cheap based on the prior 1956 to date history.
Changes In The Capital Gains Tax Rate Vs. Stock Market Performance
Prospects for increase to capital gains tax caused us to examine the historical impact such changes have on stock market performance, 1917 to date. The record is not very encouraging.
Financials Dragging Down Earnings Even On A 3000 Company Median Basis
With or without Financials, earnings momentum has been gradually deteriorating over the past two years as sales growth slowed and margins have been pressured.
Major Trend Goes Positive....No Need To "Sell In May"
The statistical tendencies of seasonal patterns just haven’t proved persistent (or logical) enough for us to build them into our Major Trend Index. Can it be a bear market if the major indices do not decline more than 20%? Putting a nail in the coffin of the decoupling theorists.
Major Trend Edges Up To Neutral In April
Major Trend Index improved to Neutral in early April and clinging there now. Are we seeing a delayed bear market rally? Examining what could come next.
Morose On Main Street… So Why Isn’t The Smart Money Worried?
Consumer confidence levels have sunk to five year lows. Could this be a bullish omen for the markets?
The GDP Report You Didn’t Read
We’re back on form after last month’s praise of government economists... questioning the value of the GDP Deflator.
NASDAQ Ten Year ACR Now At An All-Time Low...And Heading Lower
Demoralizing long term returns factor into why the investing public has avoided the U.S. stock market during the last several years — even during the bull market.
Industrial Metals: Now Over-Mined?
Waiting for the curtain to fall on Industrial Metals, we recap the “three acts” and throw in a time-tested contrarian indicator to boot.
What Early Cycle Leadership Looks Like… An Historical Perspective
In the spirit of historical market research, we thought it would be a good time to revisit which industry groups perform best from bear market lows.
Short Selling: From Un-American To All-American
It doesn’t seem too long ago when short sellers were vilified for bringing down viable public companies, and the appropriate punishment for short selling was deemed to be a public caning.
Economic Watch
Even though government statistics do not yet indicate a declining quarter of real GDP growth, we believe we are, in fact, in the grip of a recession.
Worth Noting... A Scary Top Ten List
Former Morgan Stanley strategist Byron Wein—now at Pequot Capital—publishes an annual list of potential market and economic “surprises” that has become a must read for institutional investors. Along the same lines, Wired magazine listed ten potential threats to what it calls the “Long Boom”. (Warning: This list might make The Leuthold Group look cheerful).
April Market Action
Relief finally came to Wall Street, not in the form of rebate checks or rate cuts, but from the strongest monthly returns since December 2003.
Employment Data Continues To Deteriorate
At the risk of beating the “we’re in a recession” theme into the ground, we thought some analysis of the hot-off-the-presses March employment data would be worthwhile.
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