Latest Research

Assuming a bear market has already begun, what can be expected?

Small Caps significant laggards in July, and technicals which had been supporting Small Caps, despite excessive valuations, have now eroded. Small Cap leadership model now negative.

Study of stock market performance following last Fed interest rate hikes indicates no correlation to future stock performance. Investors expecting a big surge based on this being the last hike may be disappointed.

Everybody sure hates the Homebuilders. However, contrarians should take note of this month’s analysis of earnings prospects, insider selling/buying, and the outlook for future housing starts. Now is not the time to be bottom fishing here.

Value continues to have leadership position over Growth among Large Cap stocks. Mid Caps also shifting to favor Value, but Growth still leading in the Small Cap tier.

There remains considerable macro support for industrial commodities. 

We meticulously comb through the lists of weekly new highs and new lows so that we exclude those derivatives and non-operating companies, in order to get a true picture of the stock market health.

In prior issues, we have presented those equity groups that had been displaying the best readings in terms of insider selling/buying. Several clients have expressed an interest in seeing those groups with the most significant levels of insider selling. The following table presents the ten groups with the most pervasive insider selling.

Both domestic and foreign market equity funds have seen a big fall-off of interest in the wake of recent market declines.

Continue to project higher interest rates over the next six months, particularly longer maturities. Short rates could begin to decline by early-mid 2007, after Fed finishes tightening and economy slows.

Review of profit margins by broad sector show very little contraction since we last published this work a year ago. Margins have expanded in Energy, Materials, and Health Care sectors, while there has been contraction in Consumer Staples and Information Technology.

Half time update. Leuthold looks back at December 2005 predictions. Additional comments on Inflation, Corporate Earnings, The Dollar, Oil Prices, Gold, and Federal Budget Deficit.

New group holding established in Life Sciences Tools & Services, a relatively new S&P group that provides products and services to the Pharmaceutical and Biotech industries.

For the first time since the market low in March 2003, many investors got a chance to remember what a good old fashioned correction felt like.

Stocks that had performed the best over the previous 11 month period got punished the worst in the declining market.

Highlight on the Health Care sector: Relative Valuations, Top Twenty Components, P/E Ratios, PSR, and Gross Profit Margins.

Which S&P sectors have the most cash, and how may it be put to use?

During the last few months, we have been looking at the Insider Selling and Buying among various broad sectors and have also recently been presenting those specific equity industry groups that currently have the best scores based on the insider patterns of selling and buying.

There does appear to be some validity to using relative highs on the VIX as short term Buy indicators.

Both domestic and foreign markets have seen confidence crushing declines, causing many investors to pull cash from equity holdings and perhaps direct that cash into safer havens.