Latest Research

Stocks might look superficially cheap relative to bond yields, but they continue to offer little appeal in an “absolute” valuation sense.

We believe the first move toward tighter policy occurred in January when the Fed first reduced the rate of its monthly bond purchases by $10 billion to $75 billion.

With commodity prices falling in recent months and consumer prices in the Eurozone almost flat over the latest 12 months, we’re surprised that inflation fears continue to climb the list of U.S. investor worries.

Share repurchase activity in the S&P 500 dropped off in the second quarter, after first quarter buybacks challenged the all-time high levels seen in the second and third quarters of 2007 (a window of history that should ring a bell).

Surging bond prices in Europe have opened a yield gap with the U.S. This premium favors more dollar strength in the coming months. In equity markets, the short term volatility in the dollar is a mildly bearish signal.

Statistically, stocks perform a bit better in an environment of dollar strength than dollar weakness. The best stock market action, however, occurs when there’s relative calm in the forex markets.

While a new secular bear market in commodities commenced in 2011, we still look for tactical opportunities in commodity-oriented stocks to arise from time to time.

Gold market fundamentals appear superficially bullish...

Auto Parts & Equipment has performed about twice as good as the market during the last 19 months. Margins still elevated, see more room for upside.

We define four states of the stock-bond relationship based on the directions of stock price and bond yield movements; stocks fear tightening more than true risks, while bonds are more responsive to Risk-On and Risk-Off.

New ECB stimulus should support risky assets near term but caution is warranted.

U.S. Quality Corporate Bonds & Munis Rated Favorable; High Yield Bonds Upgraded To Neutral

Up/Down Earnings ratio cools off in August.

Small Caps are selling at a 19% valuation premium relative to Large Caps.

Large Cap Growth has had an impressive advantage over Large Cap Value in six of the past seven years but that trend is reversing in 2014.

The Equal Weighted S&P 500 edged out the Cap Weighted index by 20 bps in August and  expanded its lead to almost 1% YTD (price change only).

Info Tech is largest sector weight in domestic AdvantHedge; Consumer Discretionary is heaviest weight in Global AdvantHedge.

Select Industries bought Department Stores & Health Care Facilities; Global Industries Purchased Gas Utilities & Integrated Oil & Gas.

Net equity target is 55%; waiting for clearer signal from our Major Trend Index (currently rated Neutral).

The S&P 500 gained 3.8% (price only) in August.