Green Book April 1997
Subscribe to Advisor Newsletter
Leuthold Advisors Newsletter subscriptions include a no-obligation 14-day trial. Cancel at any time before the 14 days are over and you will not be billed.
Subscribe nowLogin
For full access, please enter your credentials.
Featured Articles
1997 Volatility Update
Market volatility 1997 to date well above 1992-1995 levels and median levels 1997 to present.
AdvantHedge
Not a hedge fund, but a disciplined quantitative program that is always 100% short.
An Excellent Return Alternative to Stocks...With Much Less Risk
Bonds a good return alternative to stocks. Fed will help put the brakes on the economy while current yields seen to already discount another bump-up in rates.
Bond Market Summary
Economic expansion long in the tooth...Fed working to slow down the economy...Inflation cool...U.S. rates very competitive with foreign yields...strong dollar should continue to stimulate foreign bond buying.
Classic Value: New Screen Based Sector
We plan to replace the Semiconductors with a new 8% holding in Classic Value. Banks still dominate this screen.
DJIA Economic Sector Weightings…A Different Perspective
The four March changes in DJIA components shifted sector weightings for the index, most significantly in Energy, Financial, Healthcare and Technology.
Equity Fund Flows…Short Term
Equity Mutual Funds registered $1 billion in net redemptions in latest week. March net inflows down from February but still at strong levels considering weak new supply.
Goldilocks Forever?
The squeeze is on. Lack of corporate pricing power, higher borrowing costs, rising labor costs and the higher dollar will eventually squeeze profit margins. Look out for earnings shortfalls, while analysts catch up to a change in trend.
Interim Memo: Major Trend Index Turns Negative
Major Trend turned negative March 24th...Clients notified via Interim Memo. Bull market topping out or possibly already has. Market breadth measures signaling significant market deterioration.
Joke of the Month
This comes from me. Yes, I know some will object to the self-serving unfairness of this month’s blue ribbon award. Nevertheless this very old joke (reworked) is timely. And, I have never before won the Blue Ribbon.
Potential Fuel for the Equity Boiler: Two Diverging Gauges
U.S. focus equity mutual funds’ cash reserves is now almost as high as back in late 1990 and early 1991 (the last major market low).
Scanning the Markets
Breadth improved in March, with 41% of the sectors outperforming both the S&P 500 and the DJIA. During the first two months of 1997, only 18 of 71 sectors were able to outperform these measures.
View from the North Country
Proportionately, equity investment professionals have the most to lose when the Great Bull Market ends. But are investors really aware of their own potential stock market risks?
Table of Contents
Stock Market
- Interim Memo: Major Trend Index Turns Negative
- Goldilocks Forever?
- An Excellent Return Alternative to Stocks...With Much Less Risk
- 1997 Volatility Update
- Potential Fuel for the Equity Boiler: Two Diverging Gauges
- Equity Fund Flows…Short Term
- DJIA Economic Sector Weightings…A Different Perspective
- View from the North Country
Of Special Interest
Macro Monitor
Equity Strategies
At Random
1997 Volatility Update
Market volatility 1997 to date well above 1992-1995 levels and median levels 1997 to present.
AdvantHedge
Not a hedge fund, but a disciplined quantitative program that is always 100% short.
An Excellent Return Alternative to Stocks...With Much Less Risk
Bonds a good return alternative to stocks. Fed will help put the brakes on the economy while current yields seen to already discount another bump-up in rates.
Bond Market Summary
Economic expansion long in the tooth...Fed working to slow down the economy...Inflation cool...U.S. rates very competitive with foreign yields...strong dollar should continue to stimulate foreign bond buying.
Classic Value: New Screen Based Sector
We plan to replace the Semiconductors with a new 8% holding in Classic Value. Banks still dominate this screen.
DJIA Economic Sector Weightings…A Different Perspective
The four March changes in DJIA components shifted sector weightings for the index, most significantly in Energy, Financial, Healthcare and Technology.
Equity Fund Flows…Short Term
Equity Mutual Funds registered $1 billion in net redemptions in latest week. March net inflows down from February but still at strong levels considering weak new supply.
Goldilocks Forever?
The squeeze is on. Lack of corporate pricing power, higher borrowing costs, rising labor costs and the higher dollar will eventually squeeze profit margins. Look out for earnings shortfalls, while analysts catch up to a change in trend.
Interim Memo: Major Trend Index Turns Negative
Major Trend turned negative March 24th...Clients notified via Interim Memo. Bull market topping out or possibly already has. Market breadth measures signaling significant market deterioration.
Joke of the Month
This comes from me. Yes, I know some will object to the self-serving unfairness of this month’s blue ribbon award. Nevertheless this very old joke (reworked) is timely. And, I have never before won the Blue Ribbon.
Potential Fuel for the Equity Boiler: Two Diverging Gauges
U.S. focus equity mutual funds’ cash reserves is now almost as high as back in late 1990 and early 1991 (the last major market low).
Scanning the Markets
Breadth improved in March, with 41% of the sectors outperforming both the S&P 500 and the DJIA. During the first two months of 1997, only 18 of 71 sectors were able to outperform these measures.
View from the North Country
Proportionately, equity investment professionals have the most to lose when the Great Bull Market ends. But are investors really aware of their own potential stock market risks?
Stock Market
- Interim Memo: Major Trend Index Turns Negative
- Goldilocks Forever?
- An Excellent Return Alternative to Stocks...With Much Less Risk
- 1997 Volatility Update
- Potential Fuel for the Equity Boiler: Two Diverging Gauges
- Equity Fund Flows…Short Term
- DJIA Economic Sector Weightings…A Different Perspective
- View from the North Country