Latest Research

With today's interest rates at the lowest levels in more than two decades, the “Real” Interest Rate Theory is being used as a bullish argument asserting rates may move lower. Although this may be the case, we feel it timely to print Steve's outline highlighting the problems associated with this concept.

Client Questions...What Do You Think About Gold?...How Municipal Bonds Compare With Taxables...Don't Short The Gambling Stocks Yet

As of the May 3 tabulation of the Major Trend Index, the caution flag remains flying.

The public continues to roll the money into mutual funds and Wall Street continues to roll out the new equity offerings. The Supply/Demand standoff more or less continued in April.

Notes on Regional Banks, Health Care and the “Branded Stocks”.

A performance rundown for Leuthold equity market sectors (and other measures) ranked by 1993 performance to date.

The early April surge in the bond market stalled out at the late February highs, beating a hasty retreat in the last week of the month.

Debt monetization evaluated by three separate measures. All three measures suggest monetization is increasing, however the severity of this trend is debatable. Judge for yourself.

Does historical data suggest that a big performance decade is followed by a poor relative performance decade? Or, does a big performance decade beget an extended period of above average performance?

The Major Trend Index deteriorated in March. This calculation was done prior to the Phillip Morris debacle. I'm rather sure the upcoming April 5 calculation will not be any better.

Portfolio managers themselves are increasingly cautious towards the stock market, with the great majority very concerned about the Clinton economic program and very recently shaken by the Phillip Morris debacle.

Six months ago, this stock was at the top of most institutions' core holding list. Smashed and broken, it's now a major portfolio embarrassment. Once again, the often forgotten message from the past echoes: No Growth Is Permanent.

A month ago, we noted that our long term momentum work indicated the Tokyo stock market might be in a bottoming process and if this work was correct, these Japanese Globals (all with U.S. ADRs) could be great buys.

Yes, we also should have bought these last month. The sector moved up another 5% in March.

A performance rundown for Leuthold equity market sectors (and other measures) ranked by first quarter 1993 performance.

In March, polls were taken in Portland, Seattle, Denver and Los Angeles respectively. We recently incorporated a new question in the survey, requesting a projection of S&P 500 annualized total returns over the next 10 years. The responses have been quite interesting.

Back in August of 1990, this publication issued a warning, “Don't Get Too High on Drugs”. This five page article concluded that ethical drugs were “potentially one of the most vulnerable sectors in the entire market.” In retrospect, this anti-drug warning has proven to be one of our better calls.

In terms of outstanding investment returns from U.S. markets, the last 10 years have been close to unprecedented but the next decade in this business won't be so easy. This is what our historical research and common sense tells us.

Corporates managed a gain in March but Treasuries were weak near month end. Developing an “unbiased” Bond Market Trend Index based on a list of factors that we feel are important in determining the overall health of the long U.S. bond market.

The histograms in the following pages are taken from the January 1993 edition on Benchmarks.