Inside The Stock Market ...trends, cross-currents, and outlook
Surviving Octophobia
No! We are not bearish on the market, but think a relatively minor correction (6%-8%?) could develop before year end. Market has moved up quickly, especially in October. So a pull-back is certainly plausible.
Capex And Consumer Spending Back In Sync
Another confirmation of the strength of the recovery.
Revisiting The VIX
While we still believe there are problems with the VIX as a sell signal, our study did reveal some validity in the 1997 to date period.
View From The North Country
Thoughts and commentary regarding the groups in our Select Industries Portfolio, the Mutual Fund Timing scandal, NASD Margin Debt and deficit worries.
NASDAQ & NYSE Short Interest
Ratios decline as volumes increase.
Into The Home Stretch…..2003
Octophobia 2003…..The stock market has nothing to fear but fear itself. The financial system is awash in liquidity, the economy stronger than anticipated and investor confidence is returning.
Client Questions
Answering client questions on the economic recovery, bull market upside, valuations, Main Street and what could go wrong?
Don't Count Out The Consumer
Consumer should not be underestimated. Combined mortgage debt and household debt only 14%, just barely above the 1980-to-date median.
September Mutual Fund Flows...Almost $100 Billion Net Inflow In Last 7 Months
Flow into equity mutual funds continues. Seven consecutive months of net inflow to U.S. focus equity funds, for a total of close to $100 billion.
Volatility Update…..Both Indexes Show Lower Volatility In 2003
Volatility continues to fade in the S&P but remains volatile on a historical basis.
NASDAQ & NYSE Short Interest
New NASDAQ buy signal as volume declines. NYSE short interest ratio increases again as volume and short interest both decline.
View From The North Country
Even with a clearly improving economy, the deficit estimate for fiscal 2004 as been revised upward to $480 billion. Also, the investment survival value of opinion versus discipline and investing in actual physical industrial metals.
Following The Script?
Yes September is most frequent month to produce declines, but average loss has been only a paltry 1.3%. Also, Septembers following bear market lows (like this year) actually produced strong performance.
Current Earnings Expansion In Perspective....Strong Recovery Continues
The current earnings expansion has so far lasted five quarters. Our projections: $53.50 2003E reported EPS, $58.00 in 2004.
August Mutual Fund Flows...Right In The Comfort Zone
Past bear market recoveries typically saw Main Street investors sit on the sidelines as market conditions improved…..but not this time.
An Explanation For The Confusing S&P 500 Book Value Revision?
We still have been unable to get a satisfactory explanation from Standard & Poor’s of why and how they revised their Book Value calculation. The revisions were huge and had a significant impact on our valuation metrics.
July Mutual Fund Flows...The Big Difference A Year Can Make
Main Street’s unexpected return to Wall Street. July marks fifth consecutive month of net inflows, now totaling nearly $60 billion YTD.
Volatility Update…..Both Indexes Show Lower Volatility In 2003
In 2003, the NASDAQ has not been as volatile as in recent years, but is still more volatile than the S&P 500.
View From The North Country
Stage is set for market’s next advance, breaking out of its two month consolidation.
Insider Block Measures....Recent Selling Binge Shows Signs Of Slowing
Despite the recent rise in net selling over the past 5 months, we still view recent buy signals in Q4-2002 and Q1-2003 as bullish for the stock market.
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