Latest Research

At the end of November, The Leuthold Group established a 7% short position in long-term Treasury bonds across all tactical asset allocation funds (Core, Asset Allocation and Global). We view this as a longer-term position.

 A loss in leadership by commodity-oriented stocks could be the big surprise for 2010. Commodity sentiment is elevated, and the sector should feel the after-effects of a capacity building binge from late last decade. Rising inflation—if it’s the monetary debasement variety—won’t lift the sector.

Within Select Industries Portfolio, Diversified Financial Services equity group has been de-activated, and is being replaced by a screen-based quantitative theme called Deep Value. This is essentially a GARP type screen.

 Expect stock prices and interest rates to move higher together for a while. There are plenty of examples of this historically...although some of them go waaayyyy back.

Jun Zhu makes a compelling case for focusing China equity exposure on consumer stocks. Increases in bank “Required Reserves” mandated by China government will have greater impact on Infrastructure stocks, while consumerism is still being supported and encouraged.

Analysts are playing an increasingly important role in today’s market. In this section, we focus on the market’s interpretation of three characteristics related to analysts estimates: Popularity, Agreement, and Trust.

We continue to have longer term concerns about U.S. debt and deficit. The mountain of debt is building and interest expense rising.

In this month’s “Of Special Interest”, Eric Bjorgen looks at the cyclical nature of P/E ratios. The normalized P/E ratio follows an expansion/contraction cycle that has been repeated five times since 1926, but the interesting thing is that the cycles have lengthened significantly over time.

Don’t think we’ve seen a cyclical top, because that would mean everything essentially topped at the same time. Breadth has yet to peak in this cycle and that is one reason we expect the market to move higher over the near term.

The “New Normal”, just like the late 1990’s “New Era”, will likely fade from popular jargon over time. Counter to “New Normal” reasoning, the Consumer Discretionary sector has demonstrated remarkable performance.

We consider it incredible that most of the leading economic indicators have staged such traditional V-shaped rebounds with virtually no boost from the housing sector.

A look at stock performance in various inflation environments would seem to predict below average performance in 2009, but threat of monetary debasement inflation in 2011 and beyond could set the stage for poor performance.

Our broad read of the stock market is still bullish, but we can’t help noticing that the concerted effort to supercharge the economy via liquidity may be losing some steam.

A look at earnings and revenue risk to see how the market reveals its preference.

Jim Floyd’s analysis of the interest costs facing the U.S. due to the soaring budget deficits.

While most are content to make annual predictions at this time, leave it to Doug Ramsey to bite off an even bigger piece…predicting the next DECADE.

While most are content to make annual predictions at this time, leave it to Doug Ramsey to bite off an even bigger piece…predicting the next DECADE.

Initial outlook for 2010 is to see the S&P 500 rise to 1300 or 1350 during the first half of the year but then give up those gains in the second half of the year. We are counting on the Major Trend Index to help navigate the choppy market.

The 2008 worst performers shot to the head of the class in 2009. History however shows it doesn’t usually pay to buy the prior year’s laggards in hopes of hitting it big the next year.

Based on loud bearish complaints about the “junk rally”—and our commentary on the Revenge-of-the-Nerds (anti-momentum) effect—it should come as no surprise that 2009 marked the most dramatic reversal of industry leadership we have seen in our twenty-plus years of tracking this work.