Latest Research

Last month we assessed the effectiveness of using valuation factors as a basis for country allocation. Using 20 years of data, our results showed that they work quite well specifically for Emerging Market (EM) country-rotation, however, the same valuation-based strategy does not appear to be value-added for Developed Market (DM) allocation/rotation.

We recognize it’s uncultured to discuss federal debt and deficits during a multi-year bull market, but in economics and investing it frequently pays to worry when others don’t, and to stop worrying when others do.

We find it remarkable that the five-year trailing real return on Treasurys has dropped to zero without investors having (yet) suffered any real pain.

Bond investors residing in the Lower For Longer© camp no doubt feel vindicated by the summer rally that’s taken yields on 10-year Treasury bonds to as low as 2.06% in early September.

U.S. companies hoping for a reduction in the corporate tax rate are not exactly doing a convincing job of demonstrating “need.”

While the bond market doesn’t believe it, the past couple of months leave no doubt that the U.S. industrial economy has recovered from the energy-related slump of 2015-2016.

The milestones achieved by the current cyclical bull market have been so numerous that we hope you’ll forgive us for missing one back in May.

Throughout the early and middle innings of the current bull market, we published a variety of “terminal” S&P 500 price targets based on historical bull market norms, various technical retracements/extensions, and miscellaneous valuation objectives.

We shouldn’t bite the hand that feeds us, but it’s easy to lie with charts.

We believe this bull market still has legs… but so too might the mini-correction that’s hit mainly the secondary stocks thus far.

Does this year’s incredibly low stock market volatility mean the end is near? History is inconclusive.

Our Major Trend Index (MTI) recently fell from “positive” toward stocks to a “neutral” reading, leading us to trim bullish equity positions in our tactical portfolios.

Both the Leuthold Core Portfolio and the Leuthold Global Portfolio outperformed their benchmarks during August.

Read this week's Major Trend.

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

Like a hard-partying college student with a term paper due, the S&P 500 crammed in five positive sessions to end August—just enough to extend its monthly win streak to five. Weakness in the Equal Weighted Average, and awful performance in the lower quintiles, took all the shine off this victory.

Growth stocks outperformed for the seventh time out of the eight months of 2017. Small Cap Value, the biggest winner of 2016, has fallen back into negative territory YTD.

Small Caps are now selling at a 1% valuation discount to Large Caps. Underperformance from Small Caps have kept their valuations in check.

The Up/Down Ratio sports a reading of 1.44. Continuing the pattern of the previous two quarters, an above average “one-month” figure has been followed up with a below average “two-month” reading.

August factor performance was more of the same: Value underperforming everything else and extending its losing streak relative to Growth.