Latest Research

This “decade in review” edition examines the performance of sectors and industries, looking at the best and worst groups to reveal the stories they have to tell.

In December, the S&P 500 advanced for the fourth consecutive month, finishing the quarter with an 8.5% gain.

It’s been a while since we looked at 2019’s stock market parallels to 1999. Sorry about that… we’ve been too busy reliving 1999 on almost a daily basis, and often not in a good way. 

Read this week's Major Trend. 

An occasional critique of our valuation work is that we consider “too much” market history to form a judgment as to what constitutes “high” or “low.” This type of feedback declined during and after the financial crisis (when historic valuation thresholds were temporarily revisited), but it has become more pointed as the U.S. market has soared to new highs.

Read this week's Major Trend. 

An occasional critique of our valuation work is that we consider “too much” market history to form a judgment as to what constitutes “high” or “low.” This type of feedback declined during and after the financial crisis (when historic valuation thresholds were temporarily revisited), but it has become more pointed as the U.S. market has soared to new highs.

Small Caps are showing signs of life and the decision to overweight small caps is starting to seem relevant – and perhaps nicely profitable - again.

Leuthold’s research team has recently flagged a number of items that suggest it may be time to consider small cap stocks. This asset class has been showing signs of life and the decision to overweight small caps is starting to seem relevant – and perhaps nicely profitable - again.

Read this week's Major Trend.

Are incredibly low yields a signal of imminent peril and a clarion call for caution? Or, alternatively, could they represent an amazing investment opportunity?

If the S&P 500 closes in the green today, an RSI "overbought" signal will be triggered.

Read this week's Major Trend.

Steady incremental gains and only a few very mild setbacks brought the S&P 500 to a fresh all-time high. Fear seemed to leave the market completely as the Volatility Index dipped below 12 for the first time since October 3, 2018… a severe market correction followed shortly thereafter.

Since the end of August: Royal Blue Growth +2.2%; Royal Blue Value +14.4%. Our proprietary Large Cap Value Index has now bested Growth in YTD performance.

A third consecutive month of modest outperformance by Small Caps has lifted our Ratio of Ratios from a contemporary extreme registered at the end of August.

As we roll in the second month of Q3 2019 earnings, our Up/Down Ratio reads 1.08. Another brow furrowing bad number as we slog through the 2019 earnings-growth hangover.

While recession and election risks will dominate in the intermediate term, the overall near-term setting is still positive for risky assets. We maintain our favorable view toward credit.

The ultimate question is whether the Fed’s recent “insurance cuts” are enough to overcome uncertainties about trade talk—and the upcoming election—to avert a recession. We updated our “Slowdown vs. Recession” study to see where we stand now. The bottom line is: It’s too early to rule out a recession.

The top-three-rated sectors are Information Technology, Financials, and Communication Services. Health Care rose from sixth of eleven to the fourth-highest-rated. This is the ninth consecutive month in which Utilities, Materials, and Energy have governed the bottom three positions. The Consumer Staples sector has been occupying the #8 spot since at least July.