Green Book June 2025
At Least One Peak Is “In”
There’s a strong argument that the internal peak of the bull market is behind us. The Equal-Weighted S&P 1500—featured prominently in this section this month—is still down 12% from its November 25th bull market peak.
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Featured Articles
“Median Valuations”—And A Glass That’s Half Full
Since the low in Oct. 2022, SPX is up 66%—typical for a bull market of this age; however, the broad-market stampede distinguishing a youthful bull never happened. Yet, those four years of futility were not in vain—the valuation profile for the average stock has improved markedly.
Equity Managers Are Betting Against Recession
There have been wild gyrations in the S&P 500 Cyclical/Defensive Ratio over the last year against a backdrop of historically high Cyclical valuation premiums. In other words, there’s no recession bet priced into the equity segments that should most reflect it.
A Brief Look At Interval Funds
Developed due to the growing interest in private debt and equity, these vehicles offer a degree of liquidity and transparency within a regulated, standardized fund format. While fees and expenses are lofty versus OEFs and ETFs, interval funds’ relatively high current income may be very appealing to some.
S&P 500 Earnings Waterfall 1Q 2025
Net income soared almost 24%, with each step in our earnings growth waterfall registering in the green. Pretax margin expansion contributed 9.2%; however, this last step of the waterfall is always influenced by unusual items—and Q1 saw an abnormally positive impact from lower write-offs.
Growth Performance Roars Back
Growth quickly U-turned and led the market higher over the last two months, while low volatility stocks have been discarded. Momentum has weathered the volatility well so far—especially within small caps.
What Are Industrial Stocks Telling Us?
We’re intrigued that Industrials was the first broad sector to eclipse its pre-correction high, and is still the only one to accomplished that. A market technician might argue that the divergent strength in such an economically sensitive segment is a bullish portent for the economy and stock market—but history doesn’t support that view.
Table of Contents
Stock Market
- At Least One Peak Is “In”
- A Troubling Landscape
- No Relief From The “NOPE”
- Equity Managers Are Betting Against Recession
- Silver Linings Of A Narrow Market
- Party Like It’s 1999 (or 1998... or 2023... or 2024)
- “Median Valuations”—And A Glass That’s Half Full
- What Are Industrial Stocks Telling Us?
- Pavlov Gets His Reward
Of Special Interest
Macro Monitor
The Leuthold Refresh
Equity Strategies
Quant
Market Internals
- Earnings Falter Despite Low Hurdles
- Stuck in Neutral
- Leadership Dynamics: Growth/Value/Cyclical
- Other Market Undercurrents
Portfolios
Major Trend
Estimating the Downside
At Random
“Median Valuations”—And A Glass That’s Half Full
Since the low in Oct. 2022, SPX is up 66%—typical for a bull market of this age; however, the broad-market stampede distinguishing a youthful bull never happened. Yet, those four years of futility were not in vain—the valuation profile for the average stock has improved markedly.
Equity Managers Are Betting Against Recession
There have been wild gyrations in the S&P 500 Cyclical/Defensive Ratio over the last year against a backdrop of historically high Cyclical valuation premiums. In other words, there’s no recession bet priced into the equity segments that should most reflect it.
A Brief Look At Interval Funds
Developed due to the growing interest in private debt and equity, these vehicles offer a degree of liquidity and transparency within a regulated, standardized fund format. While fees and expenses are lofty versus OEFs and ETFs, interval funds’ relatively high current income may be very appealing to some.
S&P 500 Earnings Waterfall 1Q 2025
Net income soared almost 24%, with each step in our earnings growth waterfall registering in the green. Pretax margin expansion contributed 9.2%; however, this last step of the waterfall is always influenced by unusual items—and Q1 saw an abnormally positive impact from lower write-offs.
Growth Performance Roars Back
Growth quickly U-turned and led the market higher over the last two months, while low volatility stocks have been discarded. Momentum has weathered the volatility well so far—especially within small caps.
What Are Industrial Stocks Telling Us?
We’re intrigued that Industrials was the first broad sector to eclipse its pre-correction high, and is still the only one to accomplished that. A market technician might argue that the divergent strength in such an economically sensitive segment is a bullish portent for the economy and stock market—but history doesn’t support that view.
Stock Market
- At Least One Peak Is “In”
- A Troubling Landscape
- No Relief From The “NOPE”
- Equity Managers Are Betting Against Recession
- Silver Linings Of A Narrow Market
- Party Like It’s 1999 (or 1998... or 2023... or 2024)
- “Median Valuations”—And A Glass That’s Half Full
- What Are Industrial Stocks Telling Us?
- Pavlov Gets His Reward
Of Special Interest
Macro Monitor
The Leuthold Refresh
Equity Strategies
Quant
Market Internals
- Earnings Falter Despite Low Hurdles
- Stuck in Neutral
- Leadership Dynamics: Growth/Value/Cyclical
- Other Market Undercurrents