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The S&P 500 drifted gently lower in October as election uncertainty crowded out the story of a much better than expected start to Q3 earnings. The S&P 500 closed the month only 3% from its all-time high set in August.

Growth stocks, especially in the Small Cap tier, received an outsized punishment compared to Value. Looking at historical valuations, Growth remains cheap compared to Value.

Small Caps are selling at a 4% discount to Large Caps. Our Ratio of Ratios logged the sixth consecutive month of Small Caps sitting in the discount zone.

Our initial Up/Down Ratio for Q3 sports a reading of 1.78. This “one-month” reading is the highest its been in seven quarters.

Also known as smart beta or strategic beta, factor investing has become the hottest portfolio management trend in the last five years. The smart beta space exceeds $600 billion in assets under management.

The Major Trend Index fell 0.02 to a ratio of 1.27 for the week ended October 28, 2016. Movements within the indicator categories continued the trend of recent weeks, in which losses in the Momentum/Breadth/Divergence work have been almost entirely offset by gains elsewhere.

We’ve annoyed a few media outlets by admitting to having no clue as to which of the presidential candidates would be “better” for the stock market.

The Major Trend Index declined 0.01 points to a ratio of 1.29 in the week ended October 21st, marking the 12th consecutive week the Index has been above the 1.20 level.

Early in the third quarter earnings season, S&P 500 companies are providing a glimmer of hope that the long earnings recession may be ending. 

The Major Trend Index declined 0.01 to a ratio of 1.30 for the week ended October 14th. Large swings in the Attitudinal and Momentum/Breadth/Divergence categories largely cancelled one another out, and the remaining three categories were essentially flat.

Fed tapering of its QE3 asset purchase program ended two years ago this month, yet we don’t believe this episode has received appropriate recognition for the role it’s played in the relatively flat stock market environment that’s followed the onset of tapering in January 2014.

The Major Trend Index rose 0.04 points to a new post-correction high ratio of 1.31 for the week ended October 7th. This work continues to support above-average exposure to the stock market, and the Leuthold Core and Global Funds are both positioned with 63% in equities. 

Our AdvantHedge gross composite fell 1.8% in September, underperforming the inverse S&P 500 (+0.02%) and the inverse Russell 2000 (+1.1%).

Select Industries gross composite lost 0.8% in September, underperforming the S&P 500 gain of 0.02%.

Major Trend Index Positive: Equity Exposure At 63%

We study the effect of company guidance on ER-day price volatility. Do companies issuing more frequent and detailed guidance help to prevent big surprises on ER day?

Investors brushed off a global economic slowdown and drove up the value of risky assets. Current low-quality leadership has been in place for eight months thus far.

Herein we further explore this month’s theme of “point-in-time relationships” and subsequent market returns. We review and update a study we initially conducted and published in June 2009.

Investing is, by its very nature, a forward-looking endeavor. The returns that are earned and the risks that are incurred by investments made today will only be determined tomorrow.

Technology has proven a bright spot in an otherwise disappointing year for our Group Selection (GS) Scores, and it sits atop the sector rankings for the third consecutive month as of October.