Latest Research

Inflation is peaking and the GS Scores did a great job signaling an exit from the Industrial Metals play. Commodities were hit hard in July.

Price momentum now indicating there may still be one more leg down in this bear market. Typically, price lows come after momentum lows, and a new momentum low was hit in mid-July. Similar analysis of NYSE New Highs/New Lows data supports this conclusion.

While we continue to believe in our market bottoming thesis, we thought it may be useful to examine those periods when the P/E ratios continued to fall to the 10x to 12x earnings levels.

Today’s takeovers appear to make better strategic sense, and are coming at the hands of companies with good credit ratings, strong balance sheets, and good cash positions. This month’s “Of Special Interest” looks at the possibility that a rebound in M&A activity could heal an ailing stock market.

More bubble talk. Crude oil prices are following the same pattern as the tech bubble in the late 1990s. However, Energy stocks have not become nearly as extended as Tech stocks were in the late 1990s. Also, Energy stocks have shown far superior earnings growth compared to Tech.

In our equity portfolios we have avoided much of the Financial sector’s collapse, but unfortunately suffered a hit on the Regional Bank stocks over the past two months. The group faded to Neutral in our GS Scores this month and has been deactivated.

Well, now it’s officially a bear market. But readers should realize that since bear markets typically decline 28%, the bear is likely at least two-thirds over.

Comparing and contrasting our traditional Major Trend Index and the Global Major Trend Index. Both are now Neutral, but the Global version is showing better valuations and worse technical scores.

Why have Small Caps been outperforming Large Caps since January?

Doug Ramsey presents the rationale for our move into the Tech…Big Ten stock group.

In this month’s “Of Special Interest”, Eric Bjorgen analyzes the Coincident Economic Indicators, which the NBER uses to date the beginning and ending points of recessions. Three of the four measures are indicating a recession has already begun.

High Inflation typically is NOT a good environment for stocks, but we don’t believe the CPI will move to the “high” inflation environment.

The statistical tendencies of seasonal patterns just haven’t proved persistent (or logical) enough for us to build them into our Major Trend Index. Can it be a bear market if the major indices do not decline more than 20%? Putting a nail in the coffin of the decoupling theorists.

The stock market continued to move higher in May, with small and mid cap stocks outperforming the majority of large cap indices.

Deactivating Industrial Metals after holding period of almost six years and a 400%+ gain.

Initiating a new portfolio group holding in Oil & Gas Refining & Marketing group.

Returning to REITs as an alternative to fixed income. Adding new 4% holding in both the Core and Asset Allocation Portfolios, with the focus exclusively on Residential and Health Care REITs. Weighted average yield of the new holding is about 5.7%. 

Based on NIPA Corporate Profits, the S&P 500 is now relatively cheap based on the prior 1956 to date history.

Prospects for increase to capital gains tax caused us to examine the historical impact such changes have on stock market performance, 1917 to date.  The record is not very encouraging.

With or without Financials, earnings momentum has been gradually deteriorating over the past two years as sales growth slowed and margins have been pressured.