Latest Research

Overall, July was one heck of a month for the fixed income markets. Most of the move in short term paper came early in the month but longer term fixed income securities continued their steady rise until the last three days of July.

The July 20th issue of Pensions & Investments included an editorial prompted by my comments regarding generational inequities (July Perception for the Professional). P&I editor Mike Clowes writes that he has decided not to join AARP. I was not even aware that my friend Mike was old enough to join.

Today, T-bills are yielding 3.20% and high quality commercial paper is yielding 3.40%. It may be useful to examine these rates in a historical perspective. Some may think these are just about the lowest short term rates in U.S. history. Well, not quite.

With the Major Trend Index still negative, we remain cowards as far as the U.S. equity market is concerned. It probably takes a brave (or foolish) investor to aggressively buy stocks at current valuation levels with the economic expansion now in doubt.

The DJIA managed to score a 2.6% gain in the second quarter and the S&P 500 edged up 1.1%. But for most managers, it was tough sledding, especially for the heroes of 1992.

Today the unexpectedly bad unemployment numbers were released. The Fed immediately announced an almost panicky half point cut in the discount rate. The economic recovery may not be for real.

In June, polls were taken among our Boston clients. The results were about the most bearish we have seen since these polls were initiated back in early 1991.

The Ross Perot Factor...A New Hero Streaks Across The Political Heavens... Let’s Screw the Kids (Government Generosity for the Elderly)...U. S. Cheap Labor?

June was a rather steady dull month in the bond market but there was a pre-4th of July explosion on the upside as bond market grave dancers cheered the stunning jump in unemployment.  

A client asked if I thought the market might be about ready for another one of those super bear markets. Well, predicting bear markets is somewhat akin to predicting earthquakes. And, like the “big one” in California, we are very sure it will happen sometime, but nobody really knows when.

The Major Trend Index reading continued to deteriorate in May. Following the dictates of our disciplined weight of the evidence approach, we remain very cautious toward the U.S. equity market.

I know it may be difficult for readers to envision much of a market decline in the current environment. However, keep in mind that all bear markets are not “cyclical”. That is, some past bear markets were not related to the business cycle.

We are activating “The Phones” this month and plan a 5% position for this concept within our Model Equity Portfolio. Our goal is to provide a very defensive concept with reasonable P/E ratios and relatively high dividend yields in big liquid phone companies.

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

Ned Davis gave me this chart at the May Market Technicians Conclave in Naples Florida. It is a great chart, clearly making the point that today's stock market is overextended in terms of its historical performance history, not just in terms of valuation history.

In May, polls were taken among our clients in New York and at the Market Technicians Association’s Annual Seminar in Naples, Florida. The results were quite different.

The Ross Perot Factor... Coming Off the Drug Related Highs (The Drug Stocks)...Is The U.S. The Land of Cheap Labor and Long Hours?

The bond market, helped out by some good CPI and PPI numbers, scored typical net gains of 2+ points in May. Long bond yields, corporates, treasury zeros and treasury coupon bond yields fell 20 basis points....all in all, a pretty good month.

On the evening of May 14th, Steve Leuthold was the keynote speaker at the 17th annual Market Technicians Association Seminar in Naples, Florida. What follows is a slightly edited version of his speech and the charts and tables used in a workshop on the following day.

On Monday April 6th, The Leuthold Group’s Major Trend Index downshifted from “neutral” status to “negative” status. The prudent course is a move to the sidelines, becoming a spectator for a while.