Latest Research

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.

While 2016 is shaping up to be one of the most difficult years ever (on a relative basis) for active equity managers, one cannot blame the usual culprit of “narrow” market participation.

When we complain about the stock market’s inflated valuation levels, we’re unintentionally giving short shrift to the 50% of the global-market capitalization that resides outside the U.S. We’d be hard-pressed to describe the valuation of Developed foreign markets as any higher than neutral.

So long as one maintains a “nationalistic” perspective, Financial sector indicators support a bullish view toward both the economy and stock market.

A few months ago, we mentioned the valuation risks that had built up in the stodgy Utilities sector, which at its mid-summer peak commanded a trailing P/E multiple of 24x—almost 10 points above its 1990-to-date median of 14.7x.

For months we’ve speculated that any major extension of the bull market would require a rotation into High Beta groups from the Low Volatility and economically-defensive themes that were the market’s big winners from mid-2015 to mid-2016.

Despite a two-month stall in the blue chips, the breadth and momentum behind the market’s rally off mid-February lows remain hard to deny.

If the above observation from almost a century ago remains on the mark (as it has for almost a century), then both the cyclical bull market and accompanying economic expansion should remain in force during the next several months.

We examine the factor category strength behind Auto Parts & Equipment, Household Durables, and Paper Packaging. Each of these groups has rated Attractive or High Neutral for two consecutive months.

A look at Health Care groups’ historical performance both pre-election and post-election; we identify past trends of leaders and laggards in each period.

Value, Growth, and Profitability were all negative, while Momentum turned around its recent negative performance streak.

Although the spread cushion is thinner than it was a couple years ago, these bonds still offer the attractive combination of quality and spread.