Green Book October 2025
FOMO—With A Twist
FOMO is in full gear and—unlike the meme-stock mania of 2021—it’s been underpinned by an extremely compelling storyline: The seemingly limitless possibilities of artificial intelligence.
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Featured Articles
Fed Rate Cuts And Equity Tilts
Interest-rate cycles driven by Fed-policy changes can be the most powerful determinants of economic and market conditions. Decisions to raise or lower the fed funds rate impact sectors and styles differently; September’s rate cut prompted us to review equity winners and losers from prior episodes.
Wake Me When The Dragon Roars—One-Year Checkup On China
While the U.S. is the center of attention for global investors, Chinese stocks have quietly outperformed. At first glance, it might be tempting to give credit to the surge in Chinese Tech names. In reality, the upswing is much broader and began long before the Alibaba rally.
Bellwether Boost
Officially, as of September 30th, five of our eight bellwethers have confirmed the latest S&P 500 high. That’s typically good enough for the boat to stay afloat—and looks healthier than at February’s high.
Deviation Beneath The “Bells”
While our traditional breadth and leadership studies advise the market is quite healthy, we’ve lately observed some broader disagreement from long-term leaders, including the Magnificent Seven—of which only two have made new 52-week highs over the last month.
Factor Tilt Update: Quality Swoons
In contrast to its solid showing through the mega-cap-growth boom of recent years, Quality was a Q3 outlier, trailing SPX by over 5%. Part of the cause is sector allocation, as defensive stocks are badly out of favor. The other force was stock selection—for example, the absence of NVDA.
Recession Dashboard Update—Low Recession Risk
The stock rally and associated wealth effect make an imminent recession less likely (data that corroborates our Up/Down Earnings figures). Yet, things can change quickly when so much is riding on the market. Employment is still the biggest threat.
Table of Contents
Stock Market
- FOMO—With A Twist
- Bellwether Boost
- Deviation Beneath The “Bells”
- Aging Bull Tracking A Post-Recessionary Young’un
- Fed Rate Cuts And Equity Tilts
Of Special Interest
Macro Monitor
The Leuthold Refresh
Equity Strategies
Market Internals
- Up/Down Earnings Above Average!
- Valuations: Small Cap Vs. Large Cap
- Leadership Dynamics: Growth/Value/Cyclical
- Other Market Undercurrents
- Valuations: Small Cap Vs. Large Cap
- Leadership Dynamics: Growth/Value/Cyclical
Portfolios
Major Trend
Estimating the Downside
At Random
Fed Rate Cuts And Equity Tilts
Interest-rate cycles driven by Fed-policy changes can be the most powerful determinants of economic and market conditions. Decisions to raise or lower the fed funds rate impact sectors and styles differently; September’s rate cut prompted us to review equity winners and losers from prior episodes.
Wake Me When The Dragon Roars—One-Year Checkup On China
While the U.S. is the center of attention for global investors, Chinese stocks have quietly outperformed. At first glance, it might be tempting to give credit to the surge in Chinese Tech names. In reality, the upswing is much broader and began long before the Alibaba rally.
Bellwether Boost
Officially, as of September 30th, five of our eight bellwethers have confirmed the latest S&P 500 high. That’s typically good enough for the boat to stay afloat—and looks healthier than at February’s high.
Deviation Beneath The “Bells”
While our traditional breadth and leadership studies advise the market is quite healthy, we’ve lately observed some broader disagreement from long-term leaders, including the Magnificent Seven—of which only two have made new 52-week highs over the last month.
Factor Tilt Update: Quality Swoons
In contrast to its solid showing through the mega-cap-growth boom of recent years, Quality was a Q3 outlier, trailing SPX by over 5%. Part of the cause is sector allocation, as defensive stocks are badly out of favor. The other force was stock selection—for example, the absence of NVDA.
Recession Dashboard Update—Low Recession Risk
The stock rally and associated wealth effect make an imminent recession less likely (data that corroborates our Up/Down Earnings figures). Yet, things can change quickly when so much is riding on the market. Employment is still the biggest threat.
Stock Market
- FOMO—With A Twist
- Bellwether Boost
- Deviation Beneath The “Bells”
- Aging Bull Tracking A Post-Recessionary Young’un
- Fed Rate Cuts And Equity Tilts
Of Special Interest
Macro Monitor
The Leuthold Refresh
Equity Strategies
Market Internals
- Up/Down Earnings Above Average!
- Valuations: Small Cap Vs. Large Cap
- Leadership Dynamics: Growth/Value/Cyclical
- Other Market Undercurrents
- Valuations: Small Cap Vs. Large Cap
- Leadership Dynamics: Growth/Value/Cyclical