Green Book October 2015
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Featured Articles
A Bear Till Proven Otherwise
Major Trend Index remains decisively negative at 0.72. The “market action” category is the primary culprit behind this bearish tally, but we’ve also seen the Economic category deteriorate in recent months and would expect this trend to continue. This sequence is typical: Market action leads economic trends (and, we would argue, is a major cause of those trends).
Valuations: The Bad And The Good
Foreign valuations experienced nowhere near the expansion enjoyed by U.S. stocks during the latest bull market, but their cheaper valuations rarely seem to inoculate them from outsized losses during corrections and bear markets.
Chinese Economic Concerns Are Overdone
The traditional economic indicators are no longer as relevant as people think, and China’s condition may not be as bad as most fear.
Three Ds Are Ruining The Fed’s Little Plan
There are three Ds that are ruining the Fed’s little rate hike plan: the Dollar, Disinflation, and the Decline in wealth effect.
A Good Year To Play The Bounce?
Our research shows that the best years to “Play The Bounce” are generally ones in which the stock market is heading down into the fourth quarter. We won’t rule out an allocation to the Bounce strategy in the weeks ahead.
Purchased Advertising: Global/Digital Prospects Appealing
Advertising has been in the top rankings of our Group Selection (GS) model for several months.
Automotive Retail: Still In The Driver’s Seat
We revisit this long-held industry group and explain our positive outlook going forward.
Short Interest Is A Valuable Tool
The Short Interest Ratio performs well as a factor; on both the long and short sides.
Table of Contents
Stock Market
- A Bear Till Proven Otherwise
- Stock Market Observations
- Year-End Rebound?
- A Whimpering Sell Signal...
- Valuations: The Bad And The Good
- Sentiment, The Economy & The Fed
- Earnings: What Is Normal?
- Margins Showing Some Cracks
- Chinese Economic Concerns Are Overdone
- High Quality Stocks Shine Again During Market Tumult
Of Special Interest
Macro Monitor
- Three Ds Are Ruining The Fed’s Little Plan
- Risk Aversion Index— Moved Higher, Stayed On “Higher Risk” Signal
- US Bonds
Equity Strategies
- Purchased Advertising: Global/Digital Prospects Appealing
- Automotive Retail: Still In The Driver’s Seat
- GS Score Sector Rankings, and Highlighted Attractive Groups
Quant
Market Internals
Portfolios
Major Trend
At Random
A Bear Till Proven Otherwise
Major Trend Index remains decisively negative at 0.72. The “market action” category is the primary culprit behind this bearish tally, but we’ve also seen the Economic category deteriorate in recent months and would expect this trend to continue. This sequence is typical: Market action leads economic trends (and, we would argue, is a major cause of those trends).
Valuations: The Bad And The Good
Foreign valuations experienced nowhere near the expansion enjoyed by U.S. stocks during the latest bull market, but their cheaper valuations rarely seem to inoculate them from outsized losses during corrections and bear markets.
Chinese Economic Concerns Are Overdone
The traditional economic indicators are no longer as relevant as people think, and China’s condition may not be as bad as most fear.
Three Ds Are Ruining The Fed’s Little Plan
There are three Ds that are ruining the Fed’s little rate hike plan: the Dollar, Disinflation, and the Decline in wealth effect.
A Good Year To Play The Bounce?
Our research shows that the best years to “Play The Bounce” are generally ones in which the stock market is heading down into the fourth quarter. We won’t rule out an allocation to the Bounce strategy in the weeks ahead.
Purchased Advertising: Global/Digital Prospects Appealing
Advertising has been in the top rankings of our Group Selection (GS) model for several months.
Automotive Retail: Still In The Driver’s Seat
We revisit this long-held industry group and explain our positive outlook going forward.
Short Interest Is A Valuable Tool
The Short Interest Ratio performs well as a factor; on both the long and short sides.
Stock Market
- A Bear Till Proven Otherwise
- Stock Market Observations
- Year-End Rebound?
- A Whimpering Sell Signal...
- Valuations: The Bad And The Good
- Sentiment, The Economy & The Fed
- Earnings: What Is Normal?
- Margins Showing Some Cracks
- Chinese Economic Concerns Are Overdone
- High Quality Stocks Shine Again During Market Tumult
Of Special Interest
Macro Monitor
- Three Ds Are Ruining The Fed’s Little Plan
- Risk Aversion Index— Moved Higher, Stayed On “Higher Risk” Signal
- US Bonds
Equity Strategies
- Purchased Advertising: Global/Digital Prospects Appealing
- Automotive Retail: Still In The Driver’s Seat
- GS Score Sector Rankings, and Highlighted Attractive Groups