Market Perspectives

February's Correction: Buyable Weakness?

We believe the decline from the broadly-inclusive market highs of late January is a yet another late-cycle correction and not the first installment of something more sinister. But we are flexible in that view and remain open to evidence tilting toward the latter possibility.

Stock Market Observations

The S&P 500 and DJIA were up 10-11% on the year through early August—solid, but not quite the “melt-up” scenario we’d envisioned earlier this year.

Still In Thrall With "Low Vol"

While we wouldn’t go so far as to tar it with the “bubble” epithet, the ongoing investor obsession with "stability" is concerning. Our Low Volatility Index entry price, with a current P/E of 23.1x, is not attractive.


Active Versus Passive Return Drivers: A Year-End Update

Our July special report “Active vs. Passive: A Three-Club Headwind” studied the recent performance advantage of passive indexes over actively managed funds. 

We concluded that, just as market conditions cycle, so does the active-passive return spread. Investors are wise not to chase the winning style but to diversify their portfolios using both types of funds.

A Subdued 8th Birthday Celebration


The current bull market turned eight years old on March 9, 2017, but the hoopla has fallen short of that which surrounded birthdays #3 through #7. Could it be that complacency has set in—that bull market birthdays have become… well… a birthright? A look at the current bull market's stats versus past ones....

Trump Trade Is Overdone - MNI financial news interviewed Leuthold Group's Chun Wang


MONDAY, JANUARY 23, 2017 - 12:50

Portfolios: Leuthold: Trump Trade 'Overdone'; Max 2 Fed Hikes

By Yali N'Diaye

OTTAWA (MNI) - As U.S. President Donald Trump multiplies pro-growth, pro-business and protectionist statements, Leuthold Portfolio Manager Chun Wang told MNI the so-called 'Trump trade' is overdone and the Federal Reserve could potentially hike rates less than twice this year.

The Stock Market Is Non-Partisan


We’ve annoyed a few media outlets by admitting to having no clue as to which of the presidential candidates would be “better” for the stock market. There are just too many variables at work, not the least of which relates to initial conditions. Those conditions, for example, were ideal for Barack Obama— who entered his first term with the S&P 500 trading at just 12x 5-Year Normalized EPS. Read more:


Emerging Markets: New Leadership Period?

Our Emerging Markets Allocation Model triggered a BUY signal at the end of August after 5 1/2 years in bear mode. The model’s upgrade is consistent with a cyclical leadership run of perhaps one to four years in EM equities relative to their Developed country counterparts.

Active Management Vs. Passive: A Three-Club Headwind

Active Vs. Passive: A Three-Club Headwind

Few active managers are outperforming passive funds in the current market, and investors are wondering if this is a permanent state of affairs (spoiler alert: it isn’t!). Our research suggests relative returns between active and passive are cyclical, depending on the market environment. There are identifiable drivers behind the active/passive return cycle, and the three-club headwind facing active managers today will turn in their favor once again.

Areas of Market Strength Vs. Areas of Weakness Are Troublesome


The rally since mid-February has progressed to the point where we see trouble afoot in both the strongest and weakest charts we can find. First, the handful of sectors and themes now at new all-time highs are hardly those usually associated with a full-blown “risk-on” scenario.


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