Green Book February 2021
Silly Season
Move over, Y2K! In late January, the squeeze of popular hedge fund “shorts” eclipsed anything we saw at the peak of the Technology bubble. But who knows? An even wilder event might be in store in coming months.
Subscribe to Advisor Newsletter
Leuthold Advisors Newsletter subscriptions include a no-obligation 14-day trial. Cancel at any time before the 14 days are over and you will not be billed.
Subscribe nowLogin
For full access, please enter your credentials.
Featured Articles
Putting Two Market Maxims To The Test
For decades, stock market observers have viewed January’s action as a harbinger for the rest of the year. Is there any merit to that belief?
Stocks In The Face Of Rising Yields
With yields on the 10-Yr. Treasury finally breaking above 1.00% last month, the consensus has quickly evolved to the view that stocks and yields can continue to rise alongside one another for a while. Small Caps have shown a decisive performance edge during the recent episodes.
A Sign It Could Get “Even Sillier”
The January moves in heavily shorted Micro Caps were more bizarre than anything we saw during the wildest days of the Tech bubble. Despite these signs of rampant stock speculation by the retail crowd, we still wouldn’t characterize today’s sentiment backdrop as frenzied as the peak levels of 1999-2000.
Will The Populist Game Stop?
We look at the recent short squeeze and examine how these populist movements affect the market performance in populist vs. establishment countries, and dig deeper into the regional versus sector effect.
Research Preview: Are Financials And Value “Best Friends Forever?”
Investors looking for the long-awaited rebound in the Value style point to the potential for rising interest rates as a possible driver of style rotation. Higher rates would benefit many Financial companies—a sector closely linked to the Value style. In fact, numerous commentators believe that Value cannot experience a major run without the participation of Financials.
Homebuilding Holds Steady At The Top Of GS Scores
As new home sales skyrocket alongside plummeting mortgage rates, we revisit the historical relationship between Homebuilding stock returns and industry-specific factors that impact housing affordability and homebuilders’ bottom lines.
YOLO Mania
The Redditors came for the hedge funds, and chaos ensued. We think that when the dust settles, the Reddit crowd will be the spark that allowed more powerful market players to inflect the real pain. Our thoughts, from experience, on why this happened and how we try to avoid it.
When “Overbought” Is Bullish
The recent months’ surge in Small Caps has been historic, and the Russell 2000 continues to register ridiculously “overbought” readings on many technical oscillators. In the short-term, that might be a cause for caution on the overall market. However (and perhaps counter-intuitively), this extreme strength cements our view that a long-term leadership cycle in Small Caps is underway.
Table of Contents
Stock Market
- Silly Season
- Early-Cycle “Overheat?”
- Normalize This!
- Minding The “Middle”
- Climbing The Wall Of Confidence?
- When “Overbought” Is Bullish
- Stocks In The Face Of Rising Yields
- A Sign It Could Get “Even Sillier”
- How It Bodes For Biden
- Putting Two Market Maxims To The Test
- Energy: A Curse And A Blessing
Of Special Interest
Macro Monitor
Equity Strategies
Quant
Market Internals
Portfolios
Major Trend
Estimating the Downside
At Random
Putting Two Market Maxims To The Test
For decades, stock market observers have viewed January’s action as a harbinger for the rest of the year. Is there any merit to that belief?
Stocks In The Face Of Rising Yields
With yields on the 10-Yr. Treasury finally breaking above 1.00% last month, the consensus has quickly evolved to the view that stocks and yields can continue to rise alongside one another for a while. Small Caps have shown a decisive performance edge during the recent episodes.
A Sign It Could Get “Even Sillier”
The January moves in heavily shorted Micro Caps were more bizarre than anything we saw during the wildest days of the Tech bubble. Despite these signs of rampant stock speculation by the retail crowd, we still wouldn’t characterize today’s sentiment backdrop as frenzied as the peak levels of 1999-2000.
Will The Populist Game Stop?
We look at the recent short squeeze and examine how these populist movements affect the market performance in populist vs. establishment countries, and dig deeper into the regional versus sector effect.
Research Preview: Are Financials And Value “Best Friends Forever?”
Investors looking for the long-awaited rebound in the Value style point to the potential for rising interest rates as a possible driver of style rotation. Higher rates would benefit many Financial companies—a sector closely linked to the Value style. In fact, numerous commentators believe that Value cannot experience a major run without the participation of Financials.
Homebuilding Holds Steady At The Top Of GS Scores
As new home sales skyrocket alongside plummeting mortgage rates, we revisit the historical relationship between Homebuilding stock returns and industry-specific factors that impact housing affordability and homebuilders’ bottom lines.
YOLO Mania
The Redditors came for the hedge funds, and chaos ensued. We think that when the dust settles, the Reddit crowd will be the spark that allowed more powerful market players to inflect the real pain. Our thoughts, from experience, on why this happened and how we try to avoid it.
When “Overbought” Is Bullish
The recent months’ surge in Small Caps has been historic, and the Russell 2000 continues to register ridiculously “overbought” readings on many technical oscillators. In the short-term, that might be a cause for caution on the overall market. However (and perhaps counter-intuitively), this extreme strength cements our view that a long-term leadership cycle in Small Caps is underway.
Stock Market
- Silly Season
- Early-Cycle “Overheat?”
- Normalize This!
- Minding The “Middle”
- Climbing The Wall Of Confidence?
- When “Overbought” Is Bullish
- Stocks In The Face Of Rising Yields
- A Sign It Could Get “Even Sillier”
- How It Bodes For Biden
- Putting Two Market Maxims To The Test
- Energy: A Curse And A Blessing