Market Perspectives

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.

Knee Deep In An Earnings Recession

It’s a scary thought, but what does 2015 have in common with the infamous years of 2001, 2008, and 2009? An earnings recession for the S&P 500. The 2015 vintage certainly has some unique traits.

 

DJ Transports: Still Sounding Broad Market Warning

 

In the current cycle, the DJ Transports have underperformed for 12 months, roughly in line with the patterns preceding the market peaks of 1973, 1987, 1990 and 2000. 

The Bear Case: Before And After

While our gut instincts and quantitative disciplines aren’t always in agreement, that conflict doesn’t exist today. The evidence comes down decisively in the “bear market” camp.

What's Next For The Dollar?

 

After suffering a two month, 7% setback from its 12-year peak in March, the U.S. Dollar Index has recovered about half that loss. We expect continued dollar strength over the next year as monetary policies in the rest of the developed world remain even looser than in the United States.

Obituary Of The Bull Market: How this historic run might be viewed in hindsight

How will today’s bull market be viewed through the eventual clarity and objectivity of hindsight? Following are seven still frames that we think best capture the essence of this historic run.

 

Earnings: Less Than Meets The Eye

Earnings are abysmal -- especially among the S&P 500 companies presumed to be the torch-carriers for this cycle's profitability rebound.

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