Green Book November 2019
Can New Reins Control An Old Bull?
Three months ago, Large Cap Growth and Momentum were the winning ways to play the market; the long-time resiliency of these entrenched leaders was a cornerstone of the bullish case. Suddenly it’s Value and Deep Cyclicals leading, anything possessing Momentum, of late, has turned toxic. Ironically, this “new” leadership is now the foundation for the bullish reasoning.
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Featured Articles
Can New Reins Take Hold Of An Old Bull?
Three months ago, Large Cap Growth and Momentum were the winning ways to play the market; the long-time resiliency of these entrenched leaders was a cornerstone of the bullish case. Suddenly it’s Value and Deep Cyclicals leading, anything possessing Momentum, of late, has turned toxic. Ironically, this “new” leadership is now the foundation for the bullish reasoning.
Playing With Fire & Ice—An Inflation Scorecard
We put together an Inflation Scorecard that monitors two critical sets of inflation drivers: demand pull and cost push. The qualitatively-adjusted score is much closer to a neutral reading than the mechanical composite (which suggested quite a bit more disinflationary headwind).
Back To Y2K?
The bull market took out another old record last month when the S&P 500 topped the cumulative total return of the 1949-56 upswing. The total return since March 9, 2009, is now 468%. Since the highs of March 2000, the S&P 500 cumulative total return is actually a few basis points behind U.S. 10-year Treasury bonds.
The State Of Momentum
Going forward, high Momentum will depend on an unlikely combination of Information Technology and low Volatility, while low Momentum continues to have outsized exposure to Energy and Materials. Recent weakness only moderately tempered valuations, which could be a headwind.
Utilities' Valuation Millstone
Even though the S&P 500 roared ahead by nearly 50% over the last three years, the traditionally low beta slow-growth Utilities sector outperformed during that powerful upswing. Nevertheless, today Utilities seldom look attractive by active managers and calls to overweight the sector are scarce.
U.K. Stocks: Bottom Fishing… & Chips
A preview of the upcoming Of Special Interest that will examine if the tortured process of Brexit is creating an opportunity to bottom fish washed-out and unloved U.K. stocks. Time to buy?
Labor Cost Observations
We take a look at different data sets reflecting labor costs. The main finding is that using Unit Labor Cost as the measurement for the true cost suggests that the labor market is very tight in terms of affordability for businesses.
Table of Contents
Stock Market
- Labor Cost Observations
- Can New Reins Take Hold Of An Old Bull?
- Monetary Musings
- VLT Complicates The Market Puzzle
- Back To Y2K?
- A Short-Term S&P Top?
- Simple Bond Model Says “SELL”
- Jury Is Still Out On EM
Of Special Interest
Macro Monitor
Equity Strategies
Quant
Market Internals
Portfolios
Major Trend
Estimating the Downside
At Random
Can New Reins Take Hold Of An Old Bull?
Three months ago, Large Cap Growth and Momentum were the winning ways to play the market; the long-time resiliency of these entrenched leaders was a cornerstone of the bullish case. Suddenly it’s Value and Deep Cyclicals leading, anything possessing Momentum, of late, has turned toxic. Ironically, this “new” leadership is now the foundation for the bullish reasoning.
Playing With Fire & Ice—An Inflation Scorecard
We put together an Inflation Scorecard that monitors two critical sets of inflation drivers: demand pull and cost push. The qualitatively-adjusted score is much closer to a neutral reading than the mechanical composite (which suggested quite a bit more disinflationary headwind).
Back To Y2K?
The bull market took out another old record last month when the S&P 500 topped the cumulative total return of the 1949-56 upswing. The total return since March 9, 2009, is now 468%. Since the highs of March 2000, the S&P 500 cumulative total return is actually a few basis points behind U.S. 10-year Treasury bonds.
The State Of Momentum
Going forward, high Momentum will depend on an unlikely combination of Information Technology and low Volatility, while low Momentum continues to have outsized exposure to Energy and Materials. Recent weakness only moderately tempered valuations, which could be a headwind.
Utilities' Valuation Millstone
Even though the S&P 500 roared ahead by nearly 50% over the last three years, the traditionally low beta slow-growth Utilities sector outperformed during that powerful upswing. Nevertheless, today Utilities seldom look attractive by active managers and calls to overweight the sector are scarce.
U.K. Stocks: Bottom Fishing… & Chips
A preview of the upcoming Of Special Interest that will examine if the tortured process of Brexit is creating an opportunity to bottom fish washed-out and unloved U.K. stocks. Time to buy?
Labor Cost Observations
We take a look at different data sets reflecting labor costs. The main finding is that using Unit Labor Cost as the measurement for the true cost suggests that the labor market is very tight in terms of affordability for businesses.
Stock Market
- Labor Cost Observations
- Can New Reins Take Hold Of An Old Bull?
- Monetary Musings
- VLT Complicates The Market Puzzle
- Back To Y2K?
- A Short-Term S&P Top?
- Simple Bond Model Says “SELL”
- Jury Is Still Out On EM