Latest Research

Bond mutual fund saw estimated net cash outflows for the first time since early-February. Aside from bond and money market mutual funds, all other broad fund categories experienced net cash inflows for the week.

Recent net flows for domestic equity mutual funds turn negative, while domestic equity ETFs also experience net cash outflows for the first time in seven weeks. All year-to-date domestic equity fund tallies still hold in positive territory.

The Major Trend Index rose 0.02 to 1.21 in the week ended March 21st, matching its high for the rally leg off last summer's lows.

The Major Trend Index rose 0.01 to 1.19 in the week ended March 14th, with none of its categories witnessing a major swing during the week. This continues to support our aggressive net equity exposure levels of 65% in both the Leuthold Core and Global Funds.

Estimated net cash flows for domestic equity mutual funds fell slightly week-over-week to $0.9 billion but registered positive for a sixth consecutive week.

The Major Trend Index declined 0.03 to 1.18 in the week ended March 7th. The MTI and related market disciplines continue to support above-average allocations to equities in the Core Fund and Global Fund; net equity exposure in both funds now stands at 65%.

Estimated net cash flows for domestic equity mutual funds rose slightly week-over-week to $2.6 billion and registered positive for a fifth consecutive week.

Estimated net cash flows were positive for domestic equity funds, especially within the ETF subset. Bond ETFs, conversely, experience strong net cash outflows of $7.6 billion.

For the final week of February, the Major Trend Index closed at a five-month high of 1.21, up sharply from 1.09 at the end of January. While this bull market’s duration (five years) and magnitude (S&P gain of +175%) have exceeded our most optimistic expectations, the MTI and its related disciplines continue supporting our above-average exposure to equities in tactical accounts.

Both of our short strategies failed to keep pace with the inverse of their respective benchmarks this month.

Select Industries had no group deactivations this month, and we made no significant changes to our group weights. All group holdings currently rate Attractive. Global Industries eliminated our longest tenured group, Regional Banks, which we held for two years. We added Emerging Electric Utilities, which is our first EM oriented group since June 2013.

The Major Trend Index remains positive, and net exposure is 65% in the Core and 64% in Global.

Momentum has easily been the best quantitative factor over the last year. The only other factor with notable positive performance is Sentiment. Can this continue?

The “South Korean Discount” comes from high market concentration risks due to: a handful of companies with significant market weights, tight business relationships with suppliers, and high levels of cross-ownership among companies. 

The bull market has pushed short-term annualized performance readings well above median levels, while the longer-term readings remain subdued. But there is a silver lining…

We’ve discussed the interrelationships between industrial commodities, commodity-oriented equities and Emerging Market stocks. Getting one’s bet right on any of these three has generally led to profitable positions in all three. But that certainly hasn’t been true in recent months.

We “mapped” current readings on six time-tested valuation ratios to the month in which those readings were first matched or exceeded as the late 1990s market bubble developed.

Stocks have long looked expensive on the basis of dividend yield, but now they look increasingly stretched on Forward EPS.

With our equity exposure high and our disciplines still tilting bullish, we’re naturally more concerned with what might go wrong than missing out on some kind of 2013 repeat.

The Dow Jones Industrials’ bull market gain of +150% is well ahead of the long-term median (+86%) and average (+134%), and places the 2009-to-date move as the sixth-best all time.