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T-bonds went into a seven trading day swoon in early July. Then for the rest of the month they backed and filled. Outside the Treasury market, damage was considerably less in July.

This is the third in a series of studies presenting historical relationships between stock market valuations and bond yields. In this issue, we examine the historical relationship of the bond yield and common stock earnings yield in terms of a ratio.

Stocks selected from the newly developed “Net Net Working Capital” screen are now viewed as a distinct equity model sector. Two other new screening disciplines were included in the August Quantitative Themes: “Historical Low P/E” and “Implied Growth”.

Update on Client and “Street” Reaction to Neil Dolinsky’s Sell Report on Tele-Communications...Japanese Stock Market Update...Health Care Industry: Why Are Costs Skyrocketing?

Today, led by soybeans and other grains, the U.S. is getting a dose of Isolated Factor Inflation. The Fed can’t do anything to alleviate this, but Mother Nature can. Good hard rains in the farm belt could take the sizzle out of this brand of inflation.

Perhaps the healthiest thing of all about June in Wall Street was that nobody got very excited about it. The bearish contingent has backed off a bit, but I sure don’t see many charging bulls...not even very many sauntering bulls.

Technology jumped back up to a position of market leadership in June with eight of our technology or technology dominated sectors were up 8% or more, compared to the 4.3% gain for the S&P 500. However, Airlines led the parade with a 13% gain.

This is the second of our studies presenting historical relationships between stock market valuations and bond yields. This issue we present the Yield Differential, the basis point difference between stock dividend yields and bond yields.

A month ago, institutional bond buyers were skittish, nibbling a little, but mostly sitting on their hands waiting for lower prices. As it turned out, the bond market didn’t need rain, nor did it need easier money and lower short-term rates.

Japan is clearly becoming more assertive and aggressive in its dealings with other countries. Economic muscle instills confidence. Larry Jeddeloh provides his observations and comments on the Japanese real estate invasion of Hawaii.

Special Situation Stock Research: An Update…Budget Deficits Feature Provokes Some Reader Response…National Economic Commission

The stock market did make a new low in May, a wimpy move below the twin lows of March and April. There was a lot of misery and retching on the part of professionals and technical types, but nothing much happened. Then our Early Warning Index of intermediate bottoms registered a buy signal.

I think the market looks quite impressive. Many of the formula types, the now in vogue “tactical asset allocators”, will have to scramble back into stocks if long bond rates continue to come down or if earnings growth assumptions go up.

Not much happened in May and the market has surged these first three trading days of June. May action is now very old news. Maybe you should just skip this section this month.

No, the move in secondary stocks is not over. However, it is unlikely that the 1988 to date margin of small stock performance superiority will be sustained.

Compared to low P/E institutional stocks, the high P/E institutional stocks are very cheap in terms of relative P/E’s. But don’t get too bullish yet. There is more to the story.

U.S. Politics and Fiscal Responsibility…The Japanese Stock Market…Aussie Bond Update

How dull can a market get? In April, nobody wanted to buy stocks and nobody wanted to sell, at least nobody but the program gang and dividend passers.

It was a very dull month in our world of sectors, just as it was for the stock market as a whole.

This is the first of our studies presenting historical relationships between stock market valuations and bond yields. Herein we compare bond yields to common stock dividend yields in terms of a ratio.