Inside The Stock Market ...trends, cross-currents, and outlook
Can This Happen Here?
Assets under management in Japan's mutual fund industry now at 9% of what they were less than 7 years ago.
Expecting Stocks Down and Bonds Up? Explain Please
“If you are expecting long bond rates to fall as low as 6% later in 1997, how come you are so afraid of the stock market?” This question, or some variation thereof, is frequently heard from clients these days.
View from the North Country
Market timing: key to long term timing success is discipline. Politics 1996: the election outcome that minimizes prospects of decisive political action may provide the best market environment.
A Major Market Top in the Making
Since turning negative on July 2, the Major Trend Index has deteriorated very rapidly. Major stock market top now seems to be developing. There are now five stock market positives and seven negatives.
Watch Carefully...A New Chart
A new weekly chart tracking mutual fund cash flow, along with S&P 500 Index. Flow has been fading, new figures awaited eagerly.
1996 Volatility In Perspective (Update)
Market volatility may seem quite high, but activity is slightly below normal.
View From The North Country
A one of a kind prospectus from Buffett, a must read unless you have already seen it.
Speculative Fever Subsides (For Now)
In recent weeks, the speculative nature of the market has cooled some, and the flow into aggressive or emerging growth funds has subsided.
View From The North Country
What might change public stock market psychology? A false signal: gold stocks did not serve as a valid lead indicator for the metal in the first five months of1996. Observations from the UK: Investors still very underweighted in U.S. stocks but attitude toward U.S. market fairly positive.
Major Trend Index Fades to Negative Status
Factors affecting shift in Major Trend: fade in market momentum...decline of cash flow into U.S. focus equity funds...vast new supply of equities. Despite modifications to help adjust for this “new era” environment, it wasn’t enough to offset current negatives.
What Has Changed Since February 2, 1996?
Comparison between February 2, 1996 Major Trend (when we last went positive) and today’s calculation shows the shift primarily driven by Economic/Monetary/Inflation (higher interest rates), and by the Supply/Demand category.
View From The North Country
Leuthold Group’s Commodity Diffusion Index sell signal now looks like a false alarm. The 1996 budget deficit gap is closing at a faster rate than even Clinton’s administration expected. Have Republicans misread what the majority of Americans want from their political leaders?
On the Borderline
Major Trend close to reverting to negative status with ratio at 0.95. Shades of 1968, that great speculative garbage market. 1996 is looking like a replay...it’s just like old times...greed, excitement, performance chasing, and no earnings IPO’s.
Points Worth Making If I Can Stop Quaking
Baby boomers are investing in stock funds at the rate of $100 per month for every living American!
View From The North Country
Increased emphasis and expanded coverage of Leuthold Group’s sector/industry work. Ten new sectors expected next month. Minnesota comes to Vegas with Lyle Berman’s Stratosphere and Evel Knutson, former daredevil Norwegian stock trader from Bagley, MN has some nasty things to say about the movie “Fargo”!
Summary View
U.S. market in a temporary new valuation era and reminiscent of last leg up in Tokyo stock market in late eighties. Driving force has been the public’s belief that you “can’t lose” with equity fund shares.
The 1996 Transition
April market showered investors with several interesting changes. Technology stocks recovered their sizzle as PC shipments came in better than expected and Internet buyout fever ran prices up. Secondary stocks scored a TKO.
Major Stock Market Positives and Negatives
A review of the significant stock market positives and negatives as I currently see them. There are now five major positives and five major negatives.
Current Market View
Major Trend remains positive, total equity exposure remains at 58%, using index options to minimize and reduce risk. The “new valuation era” continues. Demand for U.S. equity funds continues to be key driver.
Major Stock Market Positives and Negatives
A review of the significant stock market positives and negatives as I currently see them. There are now five major positives and five major negatives.
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