Latest Research

Read this week's Major Trend.

What some EM countries are going through is a classic sequence that can potentially lead to a full-blown EM crisis.

The S&P 500 gained 3% in August creating a fresh all-time high for the index.

While Momentum continues to work overall, the gains have been skewed to the companies trading at the highest valuation multiples. Extremes, based on both price and valuation, have only been greater a handful of times during the period measured.

Read this month's Sector Rankings.

Herein we include an executive summary previewing our forthcoming, in-depth special report on September’s GICS sector changes. The full report, “A Prehistory of the Communication Services Sector” will be distributed soon.

The modest January air pocket went completely unnoticed by the index’s largest firms. Between the market peaks, Microsoft, Apple, and Amazon gained 15%, 26%, and 36%, respectively—adding a combined $495 billion to their market values.

After a brief surge in July, the seemingly-cursed Value stocks quickly resumed their roles as underperformers. Our Royal Blue stock lists (institutional favorites) continue to stretch their valuations higher.

Since the end of February—the last month Small Caps were under the historical 3.5% valuation premium—the Russell 2000 has outperformed the S&P 500: +16% versus +8%, respectively.

The second month of Q2 earnings gives us an Up/Down Ratio of 2.08. This is the highest “two-month” reading of the current tax-reform-juiced-earnings era but a bit of a disappointment given our “one-month” figure.

The Attitudinal category neared a new negative extreme for the rally off February lows, while the Intrinsic Value category reached a new extreme for the entire bull market. This combination of overvaluation and overconfidence will eventually be resolved with large market losses…

Trying to monitor the dozen or so regional purchasing-managers’ surveys released prior to the monthly national report  invites a perpetual case of whiplash...

Daily and weekly versions of all the advance/decline lines we track stood at cycle highs at week’s end, which—alongside the high in the Value Line Arithmetic Average—makes it hard to argue the market has narrowed significantly.

The S&P 500 has closed within a half percent of an all-time high three times this week, and the S&P 1500 Composite did make such a high on Tuesday, August 21st...

Improvement in the Momentum work has been insufficient to offset weakness elsewhere, leaving the weight of the evidence still bearish. However, persistent strength in this category has been enough to discourage us from establishing additional equity hedges in our tactical funds.

“That which does not kill us, makes us stronger” might be a good motto for this never-ending bull market. The bull continues to shrug off the effects of both Quantitative Tightening and an escalating trade war, and it’s doing so during a seasonal stretch in which many of its predecessors have sunk to their knees (if not their demise).

The Attitudinal-category reading has moved to a six-month extreme as the S&P 500 flirts with its January high; improvement in the Economic work continues to reflect the pullback in various commodity measures.

Our ongoing research into the relative performance of Active vs. Passive fund styles is based on the belief that just as market conditions cycle, so does the active-passive return spread.

The 30-point gain in the economic category was driven by a continued pullback in inflation measures. It’s possible that some of this reflects the chilling effects of escalating trade tensions. If that’s true, it’s the only positive side effect we can think of, and it won’t last long.

Higher corporate leverage and rising short-term interest rates have not yet led to problems in the credit markets, but investors should be mindful of potential risks.