Latest Research

Our Royal Blue Large Cap Growth names logged a decent “yearly” return in just one month (+9.4% in January). Value continued to lag across all market cap tiers.

Thanks to some outsized outperformance in January, the median trailing P/E for our Large Cap decile rose from 21.5x to 22.5x while the measure for Small Caps remained virtually unchanged.

Our Up/Down Ratio soared to an impressive reading of 2.65—nine years into the current recovery. This is the highest “one-month” reading we’ve seen since 1993.

After a hiatus of several years, we are re-introducing one of our favorite analytical tools. A thematic basket is a custom-designed set of assets which are exposed to, and will react similarly to, a common theme. Our first new thematic basket is “Capital Spending Beneficiaries.”

Several key drivers of capital expenditures look particularly favorable right now, and this research note focuses on the potential for improving business conditions to produce an upswing in capex.

The net impact of the tax reform is significantly positive to investment grade companies as the interest deductibility change has very little impact.

Our Risk Aversion Index turned higher last month but stayed on the “Lower Risk” signal as of the end of January. The first few days of February brought a big surge in this index and would suggest a “Higher Risk” stance for the near term.

With the dollar index breaking below the 2017 low, we believe the dollar bull market that started in 2011 (based on the trade-weighted dollar index) is most likely over.

This multi-factor estimate of stock market risk is based on a regression to median stock market levels.

The Low Volatility theme has been the darling of this bull market, benefiting from years of skepticism surrounding the economic expansion and the related lack of competition from fixed income instruments...

Read this week's Major Trend Index 

We’ve participated in this year’s upside market surge, while at the same turning a bit wistful in remembrance of a simpler and saner stock market era—an era when one could buy more than a third of the Leuthold 3000 stock universe for less than 14x earnings. Yes, that’s the comparative period of stock market sanity that existed in late February 2000, just days before the NASDAQ Composite made its historic bubble-era peak.

Read this week's Major Trend Index

The bull market continues to behave like one that’s in a late—but not terminal—phase. After a stumble late last year, the Momentum leaders have already reasserted their dominance, opening up a four percent lead on the Value stocks YTD after crushing them in 2017.

While we’re not calling for an imminent market top, we are keeping a diligent watch from the crow’s nest for signs of a coming market correction.

Read this week's Major Trend Index

Growth has trounced Value over the past year, continuing a decade-long trend of outperformance...

Read this week's Major Trend Index

The last two months of 2017 produced great results for the Bounce strategy.