Green Book December 2006
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Featured Articles
2007 Outlook: CPI Stabilizing First Half And Economy Chugging Ahead Slowly
Bond yields continue to fall as economic reports have tended to be on the weak side. Massive global liquidity and the search for yield have also helped to push yields lower. We have been way off the mark with our predictions for higher rates.
Cash Acquisitions...Shrinking The Float Of The U.S. Stock Market At A Record Rate
The key to the 2006 Supply/Demand factors has been the huge level of Cash Acquisitions this year. Current levels smash prior 2005 record level. This bullish trend could continue to support a rising stock market.
GS Score Rankings Continue To Produce High Turnover– Selling Life Sciences, Buying Tobacco
We initiated a new position in the Tobacco group, which is currently exhibiting strength across all categories of the GS Scores
Inflation Still A Potential Threat
Looking ahead, CPI twelve month rate of inflation is likely to be in the +2% area for the first half of 2007.
Introducing A New Leuthold Thematic Group – “Green Wave”
Introducing “Green Wave”…A New Leuthold Thematic Group which focuses on companies offering products, services, and technologies aimed at providing a cleaner environment.
Introducing Leuthold's Global Groups: A New Tool For Identifying Global Leadership Trends
Look for upcoming In Focus Special Research Study, which will introduce the Leuthold Group’s new Global Equity Group analysis. This new product will feature market commentary and analysis, along with Global Group Selection Scores on 67 global industry groups.
Mutual Fund Flow…..Public Still Clamoring To Foreign Equity Funds, Avoiding U.S. Equity Funds
For open end equity funds, the last seven months have seen nearly $28 billion of net redemptions despite the fact that the S&P 500 has risen almost 7%.
November Market Action
Small caps bolted out of the gates early in the month, ending November with gains that were ahead of the large cap indexes.
Playing The Bounce Update: Bounce Working Nicely So Far
Prior to 1992, the returns generated by this exercise were in the 15% to 20% range before being closed out in the subsequent year. 2006-2007 performance is so far on track to match or exceed this range.
Small Cap Earnings Lag As Economic Recovery Matures
Third quarter earnings show a widening gap between Small Cap earnings growth and Large Cap earnings growth. In the past two recessions, the gap in earnings growth between these two market cap tiers also widened with Small Cap earnings fading.
Some Erosion - But Not A Collapse - In The Wall Of Worry
The surprising restraint in investor enthusiasm has been a key pillar behind our bullish case for the stock market.
Update On Japan...Holding Our Positions, But Watching Closely
Recent market action appears to be indicating that cyclical forces have, for the time being, put Japan’s stock market recovery on hold.
View From The North Country
Leuthold shares summary comments on various subjects, such as Consumer Sentiment, and the dollar, among others. Also, airlines as growth stocks (?) and the 2006 Elections: the Incumbent advantage still dominates.
Why It Has Been Tough To Beat The S&P 500 In 2006
This month’s “Of Special Interest” study presents a handful of factors that explain why life for active managers has been much more difficult in 2006.
Table of Contents
Stock Market
- View From The North Country
- November Market Action
- Some Erosion - But Not A Collapse - In The Wall Of Worry
- Cash Acquisitions...Shrinking The Float Of The U.S. Stock Market At A Record Rate
- Small Cap Earnings Lag As Economic Recovery Matures
- Update On Japan...Holding Our Positions, But Watching Closely
- Playing The Bounce Update: Bounce Working Nicely So Far
- Mutual Fund Flow…..Public Still Clamoring To Foreign Equity Funds, Avoiding U.S. Equity Funds
Of Special Interest
Macro Monitor
Equity Strategies
- Introducing Leuthold's Global Groups: A New Tool For Identifying Global Leadership Trends
- Introducing A New Leuthold Thematic Group – “Green Wave”
- GS Score Rankings Continue To Produce High Turnover– Selling Life Sciences, Buying Tobacco
Inflation Watch
2007 Outlook: CPI Stabilizing First Half And Economy Chugging Ahead Slowly
Bond yields continue to fall as economic reports have tended to be on the weak side. Massive global liquidity and the search for yield have also helped to push yields lower. We have been way off the mark with our predictions for higher rates.
Cash Acquisitions...Shrinking The Float Of The U.S. Stock Market At A Record Rate
The key to the 2006 Supply/Demand factors has been the huge level of Cash Acquisitions this year. Current levels smash prior 2005 record level. This bullish trend could continue to support a rising stock market.
GS Score Rankings Continue To Produce High Turnover– Selling Life Sciences, Buying Tobacco
We initiated a new position in the Tobacco group, which is currently exhibiting strength across all categories of the GS Scores
Inflation Still A Potential Threat
Looking ahead, CPI twelve month rate of inflation is likely to be in the +2% area for the first half of 2007.
Introducing A New Leuthold Thematic Group – “Green Wave”
Introducing “Green Wave”…A New Leuthold Thematic Group which focuses on companies offering products, services, and technologies aimed at providing a cleaner environment.
Introducing Leuthold's Global Groups: A New Tool For Identifying Global Leadership Trends
Look for upcoming In Focus Special Research Study, which will introduce the Leuthold Group’s new Global Equity Group analysis. This new product will feature market commentary and analysis, along with Global Group Selection Scores on 67 global industry groups.
Mutual Fund Flow…..Public Still Clamoring To Foreign Equity Funds, Avoiding U.S. Equity Funds
For open end equity funds, the last seven months have seen nearly $28 billion of net redemptions despite the fact that the S&P 500 has risen almost 7%.
November Market Action
Small caps bolted out of the gates early in the month, ending November with gains that were ahead of the large cap indexes.
Playing The Bounce Update: Bounce Working Nicely So Far
Prior to 1992, the returns generated by this exercise were in the 15% to 20% range before being closed out in the subsequent year. 2006-2007 performance is so far on track to match or exceed this range.
Small Cap Earnings Lag As Economic Recovery Matures
Third quarter earnings show a widening gap between Small Cap earnings growth and Large Cap earnings growth. In the past two recessions, the gap in earnings growth between these two market cap tiers also widened with Small Cap earnings fading.
Some Erosion - But Not A Collapse - In The Wall Of Worry
The surprising restraint in investor enthusiasm has been a key pillar behind our bullish case for the stock market.
Update On Japan...Holding Our Positions, But Watching Closely
Recent market action appears to be indicating that cyclical forces have, for the time being, put Japan’s stock market recovery on hold.
View From The North Country
Leuthold shares summary comments on various subjects, such as Consumer Sentiment, and the dollar, among others. Also, airlines as growth stocks (?) and the 2006 Elections: the Incumbent advantage still dominates.
Why It Has Been Tough To Beat The S&P 500 In 2006
This month’s “Of Special Interest” study presents a handful of factors that explain why life for active managers has been much more difficult in 2006.
Stock Market
- View From The North Country
- November Market Action
- Some Erosion - But Not A Collapse - In The Wall Of Worry
- Cash Acquisitions...Shrinking The Float Of The U.S. Stock Market At A Record Rate
- Small Cap Earnings Lag As Economic Recovery Matures
- Update On Japan...Holding Our Positions, But Watching Closely
- Playing The Bounce Update: Bounce Working Nicely So Far
- Mutual Fund Flow…..Public Still Clamoring To Foreign Equity Funds, Avoiding U.S. Equity Funds
Of Special Interest
Macro Monitor
Equity Strategies
- Introducing Leuthold's Global Groups: A New Tool For Identifying Global Leadership Trends
- Introducing A New Leuthold Thematic Group – “Green Wave”
- GS Score Rankings Continue To Produce High Turnover– Selling Life Sciences, Buying Tobacco