Articles by Phil Segner, CFA Co-Portfolio Manager & Sr. Analyst

Adding in the second month of Q2 2016 earnings, our Up/Down Ratio now sports a reading of 1.23. If we isolate the month of August, it was the best second-month result of the past six quarters.

After a handful of failed attempts to breach the 2,130 closing mark set in May of 2015, the S&P 500 finally set a batch of new all-time highs in July. Alphabet +12%, Microsoft +11% and Apple +9% added more than $142B to their market caps.

Large Cap Value and Small Cap Growth finally joined the rest of the segments in positive territory for the YTD. With the market rally, Value stocks are now significantly overvalued on a historical basis.

With Small Caps outperforming in July, our Ratio of Ratios bounced off its 13-year low. Small Caps are now selling at a 2% valuation discount relative to Large Caps using non-normalized trailing operating earnings.

With the first month of Q2 2016 earnings reports in the books, our Up/Down Ratio sports a reading of 1.55. While still well below average, it is head and shoulders above the past five “one-month” ratios.

After all the hoopla about the Chinese downturn, plunging oil, an impending recession, the widening of spreads, a Trump presidency and Brexit, the S&P 500 posted two quarterly gains of 1% and 2%, respectively.

Mid Cap Value stocks have been the place to be for the first half of 2016—up almost 9% YTD. Growth stocks are still relatively cheap versus Value among Small Caps and the Royal Blue segment.

Small Caps are selling at a 5% relative valuation discount using non-normalized trailing operating earnings. In the last two years, this forward estimate increased the Large Cap P/E ratio from 16.4 to 18.4, while the Small Cap measure shrunk from 20.2 to 17.4.

With the last month of Q1 2016 earnings reports in the books, the Up/Down Ratio sports a final reading of 1.07. This matches our Q4 2015 figure but is still the lowest level see over the last 24 quarters.

Following a brief re-admittance to the “Four Percent Club,” the value of Apple declined by the equivalent of one General Electric or two IBMs in the span of just over 14 months.

The dark days of January and February seem but a distant memory. After three positive performance months in a row, the S&P 500 closed out May within spitting distance (1.6%) of its all-time high set almost exactly one year ago.

Our Deep Cyclical group took a breather in May but is still up almost 9% for the YTD. The Mid and Small Cap Value segments have also performed well this year.

Small Caps are selling at a 3% valuation discount using non-normalized trailing operating earnings. This figure is very close to our contemporary low set at the end of January.

Adding in the second month of Q1 2016 earnings reports, the Up/Down Ratio now sports a 1.07 reading. May was another net “down” month with a stand-alone reading of 0.96.

The first month of 2016 earnings reports registered a pathetic Up/Down Ratio of 1.27. With all the talk of large year-over-year earnings declines, this figure is not much of a surprise.

After nearly seven years of relatively high Small Cap P/E ratios, our Ratio of Ratios has now spent five consecutive months below its long-term average Small Cap premium of 4%.

Value stocks finished ahead of Growth within all three market cap tiers in April. Our Deep Cyclical group, all but forgotten for the last few years, has been on a relative hot streak compared to Large Cap Growth.

Apple lost $84 billion in market cap (roughly the value of Starbucks) for the month of April. The firm now sits 32% below its all-time market cap high of $750 billion set in May of 2015. Apple’s fall, and increased market participation, have boosted returns for the Equal Weighted S&P Average.

The final month of 2015 earnings reports registered an Up/Down Ratio of 1.07. Once again, we have to go back to the dark days of 2009 to find a lower “three-month” ratio.

After spending two months in discount territory, in March the Ratio of Ratios headed closer to its historical median premium of 4%.