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Green Book August 2013

We Get Bulled Over As The Major Trend Moves Back To Positive

A top-down and bottom-up look at the Emerging Markets, plus two thematic group ideas. The S&P 500’s 19% surge should ensure a stronger second half economy. IF 2011’s decline was a bear market, the new bull is only 22 months old. We handicap the high in Housing; is there a new leg in the Commodity decline; is Tech’s tide rising? Two histograms make the case that stocks are cheap. We like Electronic Manufacturing Services and Health Care Distributors. A look at the euro and the yen reveals a regime shift in both cases, but for different reasons. We expect higher volatility on the 10-year yield to persist. 

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Stock Market

Bulled Over

The Major Trend Index has experienced a bout of instability since April, twice retreating to its Neutral zone before the bull market promptly overrode both signals.

Of Special Interest

A Comprehensive Look At The Emerging Markets: Diagnosis And Prognosis

We examine Emerging Markets from both the top-down and bottom-up perspectives as we try to identify where to move and what to expect. We check in on two successful EM thematic group ideas as well.

Stock Market

The Economy And Earnings

The YTD surge of 19% in the S&P 500 should ensure a stronger second half economy, and the big five-point jump in the latest Purchasing Managers Survey (ISM) might be the first evidence of this.

Stock Market

Two Bulls For The Price Of One?

IF one considers the 2011 decline a full-fledged bear market, then it follows the new bull market is only 22 months old. After all, we’re seeing some “immature” market behavior, and some atypical bear warnings.

Stock Market

Two Valuation Metrics Still Bucking The Norm

With many (but not all) of our valuation metrics in overvalued territory, we present two histograms from our forthcoming quarterly BenchMarks publication that make the case that stocks are cheap (well, almost).

Equity Strategies

Electronic Manufacturing Services Purchased In Select Industries

Attractive valuations, improving growth and technical strength are the key drivers. The group offers an opportunity to participate primarily in the overall growth of computing devices.

Equity Strategies

Health Care Distributors Purchased In Select Industries

Excellent scores in three of six model categories, plus it offers plenty of market cap and low beta relative to other Health Care groups. We think it will benefit from broad, long-term industry trends.

Macro Monitor

10-Year: Taper the Taper—Upside Limited

If interest rates keep going higher from here, we would run the risk of derailing a still-fragile recovery. As long as the Fed tapering uncertainty exists, we expect higher volatility on the 10-year yield to persist in the mean time.

Macro Monitor

The Dollar: Upside Limited In The Near Term

A closer look at the dollar’s two main counterparts, the euro and the yen, reveals a regime shift in both cases, but for different reasons.

Quant

Sector Performance and Beta Comparisons

There are some substantial deviations in sector performance depending on your constituents and weighting scheme while, simultaneously, betas are converging toward one another.

Equity Strategies

Checking In On Some Past Group Ideas

Updates for three groups we highlighted recently, including two domestic (Education Services and Automotive Retail), and one foreign-based thematic group, the Asia Healthy Tigers Index.

Table of Contents

Stock Market

Of Special Interest

Macro Monitor

Equity Strategies

Quant

Market Internals

Portfolios

Major Trend

Estimating the Downside

At Random

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