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Core, Global, and Asset Allocation Portfolio overviews.

Specialty Stores, Home Furnishing Retail, Personal Products, and Cable & Satellite.

Information Technology sector weight declined across all market tiers, including a 0.4% drop within the S&P 500. However, it remains the largest sector weighting among Large Caps. Financials remain the heaviest weight for both Mid and Small Caps.

The Equal Weighted S&P 500 (-1.3%) slightly outperformed the Cap Weighted S&P 500 (-1.5%) and continues to outperform YTD.

Large Caps lost 1.3% in June, lagging Small Caps (-0.5%). Both fared better than Mid Caps (-1.9%). YTD, Small Caps are now ahead of the other two subsets.

Small Caps are selling at a 15% valuation premium relative to Large Caps, using non-normalized trailing operating earnings. This is slightly higher than last month’s reading of 14%. Using estimated 2013 operating earnings, Small Caps are selling at a higher valuation premium of 25% (22% last month).

Q1 relative to Q4 growth rates deteriorated across all capitalization tiers indicating a broad based top-line slowdown. Mega Caps delivered zero median top-line revenue growth in Q1.

Results look even weaker than those indicated by the first two months of the quarter’s readings. The Q1 ratio of 1.15 is well below the historical average of 1.53, and the lowest reading since Q3 2009.

Info Tech remains the largest sector short position, while Energy is second.

Airlines are Attractive in both group models, but there could be trouble on the horizon as emerging market carriers face the challenges of rapid growth.

Our Domestic Scores have five Financials groups rating Attractive; these same five industry groups are Attractive in our Global model. In total, seven Financials groups rank Attractive in the Global model, with insurance groups looking particularly Attractive.

Multi-Line Insurance was added to the portfolio. While several insurance groups currently rate Attractive, we like the diversified nature of the Multi-Line group.

The relationship between U.S. Treasury bond yields and the relative performance of cyclical stocks versus their defensive consumer counterparts appears to be changing.

Funds of funds, particularly target date funds, are growing rapidly and are now large enough to have a measurable impact on underlying fund flow trends.

Despite rising market volatility, Low Quality stocks ended Q2 up 3.8%, slightly better than High Quality’s 3.4% gain. YTD, High Quality stocks are up 14%, just behind Low Quality stocks at +16.6%.

Gold’s recent weakness may be more ominous for industrial commodity investors.

With the notable exception of the Consumer Discretionary sector, cyclical stocks topped out globally on a relative basis in early 2011 (Chart 3). Throughout the last two and one half years, there have been repeated calls for industrial cyclicals—which were, of course, the leaders of the last cyclical bull market—to reassume stock market leadership.

Deteriorating Technicals drove the move to Neutral, but a new positive reading in the Attitudinal category gives some hope to the bulls.