Latest Research

Continue to conclude the cyclical bull market prevails but my level of conviction is down a few notches. Also, an oil message from the market and “Don’t Be Economic Girlie Men”.

Small Cap stocks lagged Large Caps in July and August. Possibly getting close to a formal transition in which Large Caps take over the leadership role.

Most are aware of the recently released, relatively weak Q2 2004 ‘NIPA’ profits report.  However, many may not be aware that NIPA earnings were recently revised downward for 2001-2003 periods.

Yes it’s true that Small Caps have more cash on their balance sheets but, on a trend basis, the Small Cap cash advantage is shrinking.

In light of the continuing move in oil prices, we thought it would be useful to update our inflation adjusted oil and gas related charts from our June publication.

American consumer spending is still in an uptrend, helping to drive economic growth, although to a lesser extent. In the meantime, CapEx spending has been accelerating, which should serve to pick up any economic slack.

An initial screen for potential bounce candidates compiled in late August turned up a list well in excess of 200 names, highly concentrated in the Technology sector.

Current recovery tracking below the performance averages of past bear market recoveries.

Over the past several months, we have been comparing S&P 500 performance for the current election year to the performance averages of all election cycles since 1944.

U.S. focus equity fund net outflow of $5.0 billion is estimated for August.

The strong relative performance in Industrial Metals shares over the past four months provides evidence that investors are beginning to buy into the sustainability of the current uptrend in metals prices.

August produced very little movement in the major market indices, which was not so bad considering a difficult July.

Falling interest rates and declining oil prices should bolster consumer spending and hopefully get us past the current economic soft spot.

Based on oil futures prices, 2005 year-end  consensus  earnings forecasts for the Integrated Oil & Gas group appear too low! These too-low forecasts imply further upside for oil shares, and, at the very least, limited downside relative to the rest of the market.

Large Cap Growth stocks are relatively cheap compared to Large Cap Value stocks. The next major trend should be in Large Cap Growth.

Terrorist threats, rising oil prices, the war in Iraq, and upcoming presidential election seem to have taken center stage against a backdrop of impressive corporate earnings momentum.

Market seems to be moving toward a possible leadership transition from small/mid caps to large caps. Small caps significantly lagged large caps in July, and also now lag YTD.

Current economic recovery may appear to be lagging, with a GDP growth rate of +3.6% ACR since Q1 2001, but most recent five expansions averaged +4.2% ACR and the big 1990-2000 expansion grew at only 3.4% per year. Economy is still healthy.

Health Care was our top-ranked sector from March 2003 to February 2004. Since that time, the sector’s composite score has steadily fallen. 

Over the past several months, we have been comparing S&P 500 performance for the current election year to the performance averages of all election cycles since 1944.