Green Book August 2006
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
Characteristics Of A Bear Market
Assuming a bear market has already begun, what can be expected?
Commodity Inflation = OWN MATERIALS STOCKS; Commodity Deflation = OWN MATERIALS STOCKS!!
There remains considerable macro support for industrial commodities.
Economic Outlook
Continue to project higher interest rates over the next six months, particularly longer maturities. Short rates could begin to decline by early-mid 2007, after Fed finishes tightening and economy slows.
High P/E Stocks: Becoming A Safe Place To Hide?
Value continues to have leadership position over Growth among Large Cap stocks. Mid Caps also shifting to favor Value, but Growth still leading in the Small Cap tier.
Inflation Watch
CPI on a twelve month basis still expected to decelerate over the next three months. The final 3 months of the year, however could be another story, with CPI twelve month inflation accelerating.
July Market Action
In July, weakness early in the month later transitioned into a comeback rally of sorts for the major stock market indexes.
Market Action After Last Fed Rate Increase
Study of stock market performance following last Fed interest rate hikes indicates no correlation to future stock performance. Investors expecting a big surge based on this being the last hike may be disappointed.
Mutual Fund Flow…..Public Continues To Be Cautious Toward U.S. Equities
Both domestic and foreign market equity funds have seen a big fall-off of interest in the wake of recent market declines.
S&P 500 Sector Profit Margins Update
Review of profit margins by broad sector show very little contraction since we last published this work a year ago. Margins have expanded in Energy, Materials, and Health Care sectors, while there has been contraction in Consumer Staples and Information Technology.
Stock Market Downside Limited Based On Current Valuations
Small Caps significant laggards in July, and technicals which had been supporting Small Caps, despite excessive valuations, have now eroded. Small Cap leadership model now negative.
The Homebuilding Group – Value Play Or Value Trap?
Everybody sure hates the Homebuilders. However, contrarians should take note of this month’s analysis of earnings prospects, insider selling/buying, and the outlook for future housing starts. Now is not the time to be bottom fishing here.
Unattractive Groups Based On Group Insider Scores
In prior issues, we have presented those equity groups that had been displaying the best readings in terms of insider selling/buying. Several clients have expressed an interest in seeing those groups with the most significant levels of insider selling. The following table presents the ten groups with the most pervasive insider selling.
View From The North Country
Everybody sure hates the Homebuilders. However, contrarians should take note of this month’s analysis of earnings prospects, insider selling/buying, and the outlook for future housing starts. Now is not the time to be bottom fishing here. Nor is it time to be buying oil stocks.
Weekly New High/New Low Data Not Yet Indicating A Stock Market Bottom
We meticulously comb through the lists of weekly new highs and new lows so that we exclude those derivatives and non-operating companies, in order to get a true picture of the stock market health.
Table of Contents
Stock Market
- View From The North Country
- July Market Action
- Characteristics Of A Bear Market
- Stock Market Downside Limited Based On Current Valuations
- Market Action After Last Fed Rate Increase
- The Homebuilding Group – Value Play Or Value Trap?
- High P/E Stocks: Becoming A Safe Place To Hide?
- Weekly New High/New Low Data Not Yet Indicating A Stock Market Bottom
- Unattractive Groups Based On Group Insider Scores
- Mutual Fund Flow…..Public Continues To Be Cautious Toward U.S. Equities
Of Special Interest
Macro Monitor
Equity Strategies
Inflation Watch
Characteristics Of A Bear Market
Assuming a bear market has already begun, what can be expected?
Commodity Inflation = OWN MATERIALS STOCKS; Commodity Deflation = OWN MATERIALS STOCKS!!
There remains considerable macro support for industrial commodities.
Economic Outlook
Continue to project higher interest rates over the next six months, particularly longer maturities. Short rates could begin to decline by early-mid 2007, after Fed finishes tightening and economy slows.
High P/E Stocks: Becoming A Safe Place To Hide?
Value continues to have leadership position over Growth among Large Cap stocks. Mid Caps also shifting to favor Value, but Growth still leading in the Small Cap tier.
Inflation Watch
CPI on a twelve month basis still expected to decelerate over the next three months. The final 3 months of the year, however could be another story, with CPI twelve month inflation accelerating.
July Market Action
In July, weakness early in the month later transitioned into a comeback rally of sorts for the major stock market indexes.
Market Action After Last Fed Rate Increase
Study of stock market performance following last Fed interest rate hikes indicates no correlation to future stock performance. Investors expecting a big surge based on this being the last hike may be disappointed.
Mutual Fund Flow…..Public Continues To Be Cautious Toward U.S. Equities
Both domestic and foreign market equity funds have seen a big fall-off of interest in the wake of recent market declines.
S&P 500 Sector Profit Margins Update
Review of profit margins by broad sector show very little contraction since we last published this work a year ago. Margins have expanded in Energy, Materials, and Health Care sectors, while there has been contraction in Consumer Staples and Information Technology.
Stock Market Downside Limited Based On Current Valuations
Small Caps significant laggards in July, and technicals which had been supporting Small Caps, despite excessive valuations, have now eroded. Small Cap leadership model now negative.
The Homebuilding Group – Value Play Or Value Trap?
Everybody sure hates the Homebuilders. However, contrarians should take note of this month’s analysis of earnings prospects, insider selling/buying, and the outlook for future housing starts. Now is not the time to be bottom fishing here.
Unattractive Groups Based On Group Insider Scores
In prior issues, we have presented those equity groups that had been displaying the best readings in terms of insider selling/buying. Several clients have expressed an interest in seeing those groups with the most significant levels of insider selling. The following table presents the ten groups with the most pervasive insider selling.
View From The North Country
Everybody sure hates the Homebuilders. However, contrarians should take note of this month’s analysis of earnings prospects, insider selling/buying, and the outlook for future housing starts. Now is not the time to be bottom fishing here. Nor is it time to be buying oil stocks.
Weekly New High/New Low Data Not Yet Indicating A Stock Market Bottom
We meticulously comb through the lists of weekly new highs and new lows so that we exclude those derivatives and non-operating companies, in order to get a true picture of the stock market health.
Stock Market
- View From The North Country
- July Market Action
- Characteristics Of A Bear Market
- Stock Market Downside Limited Based On Current Valuations
- Market Action After Last Fed Rate Increase
- The Homebuilding Group – Value Play Or Value Trap?
- High P/E Stocks: Becoming A Safe Place To Hide?
- Weekly New High/New Low Data Not Yet Indicating A Stock Market Bottom
- Unattractive Groups Based On Group Insider Scores
- Mutual Fund Flow…..Public Continues To Be Cautious Toward U.S. Equities