Latest Research

With the S&P 500 levitating near its all-time high, stock market leadership is peculiar—characterized by a flight to quality. And, despite the market’s violent bounce off February lows, there have been only four new market highs set by key indexes on our “Bull Market Top Timeline” table.

Over the last eight years, policymakers around the world have held interest rates at unimaginably low levels, run persistently large fiscal deficits, and (in some cases) engaged in outright money-printing via quantitative easing programs.

Bond funds (including ETFs), foreign-focused equity mutual funds and domestic-focused ETFs are the only categories capturing positive cash flows YTD.

Back to the medians (1957 to date): S&P 500 19% downside.

We examine the factor category strength behind Commodity Chemicals, Hypermarkets & Super Centers, and Semiconductor Equipment.

The EMS group (from the Info Tech sector) now ranks as the third highest of 115 industries.

The demand for safe spreads is here to stay and we maintain our Favorable view on these bonds.

With global bond yields plumbing new all-time lows, we continue to favor Higher Quality credits within fixed income.

We think the best guide for Brexit is still the 1992 U.K. exit from the ERM. However, most U.K. assets are more expensive than they were back in 1992, and thus more vulnerable to shocks. 

Different measures of value may tell different stories. Using various metrics, we examine the valuation of Large Caps, Small Caps and equity sectors.

After all the hoopla about the Chinese downturn, plunging oil, an impending recession, the widening of spreads, a Trump presidency and Brexit, the S&P 500 posted two quarterly gains of 1% and 2%, respectively.

Mid Cap Value stocks have been the place to be for the first half of 2016—up almost 9% YTD. Growth stocks are still relatively cheap versus Value among Small Caps and the Royal Blue segment.

Small Caps are selling at a 5% relative valuation discount using non-normalized trailing operating earnings. In the last two years, this forward estimate increased the Large Cap P/E ratio from 16.4 to 18.4, while the Small Cap measure shrunk from 20.2 to 17.4.

With the last month of Q1 2016 earnings reports in the books, the Up/Down Ratio sports a final reading of 1.07. This matches our Q4 2015 figure but is still the lowest level see over the last 24 quarters.

Factor performance was muted prior to the vote; it turned volatile in the remaining days of June following. Momentum was the only factor to work before and after June 23rd — the day of the Brexit vote.

The Major Trend Index edged up 0.02 points to a ratio of 1.04, using data through the week ended July 1st, and remains within its 0.95-1.05 neutral zone for the second consecutive week.

The Major Trend Index fell 0.12 to a Neutral ratio of 1.02 based on data for the week ended June 24th, led entirely by a decline in the Momentum/Breadth/Divergence category.

The Major Trend Index fell 0.07 to a ratio of 1.14 based on data for the week ended June 17th, reflecting another sizable weekly decline in the Attitudinal category.

The Major Trend Index edged down 0.03 points to a ratio of 1.21 based on data for the week ended June 10th, triggered mainly by an 80-point drop in the Attitudinal category.

In a reversal of factor performance, Value underperformed while everything else worked well.