Green Book April 2014
U.S. Markets See Uniform Strength, While The World Seems Fractured
Based on the historical percentages, the bull market should have a minimum of four to six months of life left. But the market has ways of tricking you. All ten of the S&P 500 sectors recorded a sequential increase in four-quarter trailing net profit margins. Eight of ten S&P 500 sectors are recording profit margins well above their long-term medians. Margin debt levels are high, but that’s because stock prices are high. The critical relationship is the comparative rates-of-change in Margin Debt and stock prices. In December, we declared the market was likely entering into a cycle where High Quality stocks would shine. We were wrong. The launch of the Large Cap leadership cycle in April 2011 is receiving no attention whatsoever.
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Featured Articles
U.S. Markets See Uniform Strength, While The World Seems Fractured
Based on the historical percentages, the bull market should have a minimum of four to six months of life left. But the market has a way of throwing sand in the gears when you think you’ve begun to understand its internal mechanics.
Profit Margins At The Sector Level
All ten of the S&P 500 sectors recorded a sequential increase in four-quarter trailing net profit margins. But consider where sector margins stand today relative to their 25-year medians. Eight of ten S&P 500 sectors are recording profit margins well above their long-term medians.
Margin Debt: Much Ado About Not Very Much
Margin debt levels are high, but that’s because stock prices are high. The critical relationship is the comparative rates-of-change in Margin Debt and stock prices.
High Quality Stock Rally Cut Short
In December, we declared the market was likely entering into a cycle where High Quality stocks would shine. Unfortunately, market action since then reminds us of the virtue of being humble.
A Milestone You Might Have Missed
The fifth anniversary of the bull market was met with fanfare, but the launch of the Large Cap leadership cycle in April 2011 is receiving no attention whatsoever.
Late March Reversal… And The First Shall Be Last
We examine the impact of March’s strong group leadership reversal on the top and bottom of our group model.
Select Industries Purchases Commodity Chemicals
Well-rounded factor strength, coupled with an intriguing fundamental backdrop, lead us to our first Materials group holding in a year.
Twisty Curves
The short end of the yield curve sold-off to price in an earlier-than-expected rate hike, while the long end rallied as the prospect of tightening reduced longer-term inflation expectations.
Table of Contents
Stock Market
- Time For A Spring Shower?
- U.S. Markets See Uniform Strength, While The World Seems Fractured
- Profits: “Margin”-al Improvement In Q4
- Margin Debt: Much Ado About Not Very Much
- A Milestone You Might Have Missed
- High Quality Stock Rally Cut Short
- Why Are EM Small Caps & Frontier Markets Outperforming?
Of Special Interest
Macro Monitor
Equity Strategies
- Late March Reversal… And The First Shall Be Last
- Highlighted Attractive Groups
- Select Industries Purchases Commodity Chemicals
Quant
Market Internals
- Earnings Momentum
- Small/Mid/Large Caps
- Growth/Value/Cyclicals
- S&P 500 Equal Weight
- Sector Characteristics of the S&P Indicies
Portfolios
- Core & Global Portfolios Equity Exposure Unchanged In April
- Long Only Portfolios Beating Benchmarks
- Short Portfolios: Both Portfolios Lag Benchmarks
Major Trend
Fund Flow Trends
Estimating the Downside
Appendix
U.S. Markets See Uniform Strength, While The World Seems Fractured
Based on the historical percentages, the bull market should have a minimum of four to six months of life left. But the market has a way of throwing sand in the gears when you think you’ve begun to understand its internal mechanics.
Profit Margins At The Sector Level
All ten of the S&P 500 sectors recorded a sequential increase in four-quarter trailing net profit margins. But consider where sector margins stand today relative to their 25-year medians. Eight of ten S&P 500 sectors are recording profit margins well above their long-term medians.
Margin Debt: Much Ado About Not Very Much
Margin debt levels are high, but that’s because stock prices are high. The critical relationship is the comparative rates-of-change in Margin Debt and stock prices.
High Quality Stock Rally Cut Short
In December, we declared the market was likely entering into a cycle where High Quality stocks would shine. Unfortunately, market action since then reminds us of the virtue of being humble.
A Milestone You Might Have Missed
The fifth anniversary of the bull market was met with fanfare, but the launch of the Large Cap leadership cycle in April 2011 is receiving no attention whatsoever.
Late March Reversal… And The First Shall Be Last
We examine the impact of March’s strong group leadership reversal on the top and bottom of our group model.
Select Industries Purchases Commodity Chemicals
Well-rounded factor strength, coupled with an intriguing fundamental backdrop, lead us to our first Materials group holding in a year.
Twisty Curves
The short end of the yield curve sold-off to price in an earlier-than-expected rate hike, while the long end rallied as the prospect of tightening reduced longer-term inflation expectations.
Stock Market
- Time For A Spring Shower?
- U.S. Markets See Uniform Strength, While The World Seems Fractured
- Profits: “Margin”-al Improvement In Q4
- Margin Debt: Much Ado About Not Very Much
- A Milestone You Might Have Missed
- High Quality Stock Rally Cut Short
- Why Are EM Small Caps & Frontier Markets Outperforming?
Of Special Interest
Macro Monitor
Equity Strategies
- Late March Reversal… And The First Shall Be Last
- Highlighted Attractive Groups
- Select Industries Purchases Commodity Chemicals
Quant
Market Internals
- Earnings Momentum
- Small/Mid/Large Caps
- Growth/Value/Cyclicals
- S&P 500 Equal Weight
- Sector Characteristics of the S&P Indicies
Portfolios
- Core & Global Portfolios Equity Exposure Unchanged In April
- Long Only Portfolios Beating Benchmarks
- Short Portfolios: Both Portfolios Lag Benchmarks