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Political and geo-political concerns linger while we are entering a seasonally unfavorable window. Maintain Neutral.

Volatility among non-equity asset classes has gone up noticeably while the VIX dipped lower. We still expect volatility to stay high and continue to play defense within fixed income.

Bond market volatility picked up quite a bit in May but the higher-low/higher-high pattern in the 10-year yield is still intact, indicating the primary uptrend has not reversed.

The S&P 500 held on to its early gains and settled 2.4% higher for the month of May.

The Leuthold Core Portfolio and the Leuthold Global Portfolio both lagged their 100% equity benchmarks last month as the long-stock exposure trailed the benchmarks, while the equity hedge and fixed income both produced negative returns.

A sharp loss in the Attitudinal category reflects declines in all major groupings of sentiment measures, ranging from investor opinion surveys, to fund flows, to option trading activity.

Tomorrow is the Minnesota season-opener for muskies, but the fanatics who chase them are likely disappointed that it comes a few days after an event that’s known to trigger these beasts: the full moon. The screenshot is from our $9.95 “iSolunar” iPhone app, and shows that Saturday merits only a “three fish” day (out of a possible “four fish”)—based on the moon’s fading illumination. 

Supply/Demand work experienced the week’s largest category loss and reflects declines in the Smart Money Flow Index (which tracks opening and closing action in the DJIA) and in our Institutional Accumulation measure, which compares up and down volume to prevailing price action.

Last week’s piece challenged the now popular view that new highs for the Russell 2000 are a decisively bullish factor for the stock market in the near term. To our surprise, we found that market returns during periods of well-defined Small Cap leadership are significantly lower than when Smalls are laggards.

Value is the philosophical cornerstone of many legendary portfolio managers and is widely recognized as one of the most robust quantitative investment factors. Yet, despite its compelling conceptual merits and long-term record of superior returns, recent years’ underperformance of Value has lasted long enough to weigh on even 10-year performance records. 

The daily advance/decline numbers suggest the recent bounce has been broad, but analyses based on the 52-week highs and lows (including various versions of the “High/Low Logic Index”) are flashing warning signals similar to the ones seen in the fall of 2007 and summer of 2015.

The Russell 2000 closed above its January 26th high on Wednesday, and well beforehand bulls had seized upon the secondary stocks’ leadership as evidence that all is right again with both the U.S. economy and stock market...

Last week’s rally succeeded in driving up one of our shortest-term measures of investor optimism, while corporate tax cuts have helped generate the highest readings in the 33-year history of our earnings “breadth” work.

The 2017 run that pushed the nine-year bull market to all-time highs made it very difficult to find anything that looked cheap, and few choices that looked average. Even the Tech bubble of 1999 allowed investors to find moderately priced stocks among the mundane old-economy companies...

An important momentum sub-model, which considers relationships among rates-of-change for the major indexes, slipped to neutral after having been bullish since the spring of 2016. And while this model is whipsaw-prone, it’s generally on the right side of significant market breakouts or breakdowns.

This year we’ve written several notes surrounding the Consumer Discretionary sector’s prominence among our top Group Selection (GS) Scores. This pattern persisted for a fifth consecutive month in April.

Back testing shows stock-level factor alpha can be captured at the country level. With the rapid growth of single-country ETFs, this may prove an efficient, practical alternative to individual stock selection.

The coming months form a bearish cross-section of two of the most prominent calendar anomalies: “Sell In May,” and the Presidential Election Cycle (in which the mid-term year is statistically the weakest). Between the two, we’d have to rate the former as more powerful and statistically persistent.

Consumer Staples has historically been the sector most resistant to intermediate stock market corrections, exhibiting an average “downside capture” of less than 40% during all such declines dating back to 1989.

The first quarter S&P 500 earnings “beat” rate stands to be the highest in history, as any CEO with a pulse has learned to lower the hurdle.