• Dynamic Factor Investing: A Study In Value

    June 07, 2017 BY Scott Opsal

    Investment factors experience performance cycles just like every other asset and index. The Value factor is robust across definitions, as all eight versions produced positive excess returns under long/short and long-only methodologies.

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  • Major Trend

    MTI Supports Cyclically Bullish Stance

    June 19, 2017 BY Doug Ramsey

    The Major Trend Index rose 0.01 to a ratio of 1.14 in the week ended June 16th, with moderate swings across four categories mostly canceling each other out. The work continues to support a cyclically bullish stance on equities, and our tactical funds remain positioned with equity exposure of 66%.

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  • Inflation Watch

    Inflation Disappoints Again

    June 15, 2017 BY Chun Wang

    The CPI numbers have disappointed three months in a row. Weak commodity prices do not inspire higher inflation expectations. The global scope of inflation deceleration adds more weight to the recent soft readings. However, lower bond yields relative to nominal growth rate is inflationary and buffers the impact of weak inflation and rate hikes.

     

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  • Stock Market

    Stock Market Observations

    June 07, 2017 BY Doug Ramsey

    After a two-month lull, stock market momentum reasserted itself in May bringing our summer S&P 500 target of 2,600 back into focus… Meanwhile, we’ve fielded several media calls about the “FANG” stocks’ large contribution to some YTD returns—but that doesn’t diminish the new highs being made elsewhere by disparate groups… NYSE Weekly A/D Line and New Highs/Lows figures also suggest the stock market isn’t yet top-heavy enough to tip over.

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  • Stock Market

    A Contrarian “Late-Cycle” Play?

    June 07, 2017 BY Doug Ramsey

    The Amazon Effect masks both the underperformance of the average Discretionary stock and the relative value that’s been reestablished across the sector. “Discretionary ex-Amazon” is a better contrarian pick than Energy.

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  • Bonds

    Goldilocks—Enjoy It While It Lasts

    June 07, 2017 BY Chun Wang

    The best interpretation of the current cross-asset message is the scenario of goldilocks, and there are reasons to believe this is a possible scenario for the near term.

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  • Stock Market

    Emerging Markets: Fundamental Diffusion Indicators

    June 07, 2017 BY Jun Zhu

    Within EM, more robust growth is being exhibited by: 1) firms in Emerging Europe; 2) companies in Energy, Materials, and Financials; and, 3) larger cap companies.

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  • Fund Flow Trends

    YTD Fund Inflow Remains Highest Since 2013

    June 06, 2017 BY Kristen Perleberg

    Excluding money market, all equity and bond fund categories have captured cumulative net cash inflow that is more than five times the level seen at this time last year. ETF inflow this year has accounted for nearly 80% of all flows.

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  • Inflation Watch

    Inflation Subpar Again

    May 12, 2017 BY Chun Wang

    The latest CPI numbers are slightly weaker than expected. We think expectations for higher inflation are still on the high side. The global scope of inflation deceleration adds more weight to the recent soft readings. Patience is the right approach for the reflation trade at this point.

     

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  • Stock Market

    Spring Doldrums?

    May 05, 2017 BY Doug Ramsey

    Bull markets bail out bad decisions—like buying the market high ahead of the Great Recession.

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  • Stock Market

    Stock Market Observations

    May 05, 2017 BY Doug Ramsey

    The S&P 500 has labored beneath its March 1st bull market high for the last two months while underlying breadth and leadership trends have remained mostly favorable.

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  • Bonds

    Reflation Trade Complicated By Data Challenges

    May 05, 2017 BY Chun Wang

    The dominant theme in the last few weeks has been the notable weakness in macro-economic data.

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  • Stock Market

    Leverage Factor: A Tailwind For High Quality Stocks?

    May 05, 2017 BY Jun Zhu

    Following 2016 underperformance, High Quality stocks eked out an advantage over Low Quality stocks to begin 2017 (+5.3% versus +2.1%, respectively). Yet, the “Junk Rally” trend seems difficult to reverse.

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  • Stock Market

    The Intelligent Use Of Smart Beta

    May 05, 2017 BY Scott Opsal

    Quantitative investing has become an integral component of professional investment management, and smart beta funds have become popular vehicles for advisors as they assemble actively-managed client portfolios.

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  • Equity Strategies

    Dynamics Shift Among Auto-Related Industries

    May 05, 2017 BY Kristen Perleberg

    Automotive Retail group takes a backseat while Auto Parts & Equipment takes over the wheel. We examine the market/environmental dynamics that may be causing these groups’ routes to diverge.

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  • Quant

    Value Continues to Struggle in 2017

    May 05, 2017 BY Greg Swenson

    Value has taken its lumps to start 2017, but is it really that bad for the factor and its dedicated followers?

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  • Of Special Interest

    Sector Profit Margins: A Long-Term Review

    May 05, 2017 BY Doug Ramsey

    Despite real GDP growth of just 1.6% in 2016, the median S&P 500 company earned a net profit margin of 9.7%, only 40 basis points below the record high established in 2014.

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  • Inflation Watch

    Inflation-Weaker Sooner Than Expected

    April 19, 2017 BY Chun Wang

    The latest CPI is weaker and the softness was sooner than we expected.  More alarming is the recent broad-based deterioration in economic data.  Lower inflation expectations have flattened the yield curve recently, which hurt Financial stocks. We believe inflation has likely peaked for the time being and patience is the right approach for the reflation trade at this point.

     

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  • Stock Market

    Spring Forward, Fall Back?

    April 07, 2017 BY Doug Ramsey

    The S&P 500 has gained about 5% on the year, respectable but hardly consistent with the “melt up” scenario we thought might occur.

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  • Stock Market

    Stock Market Observations

    April 07, 2017 BY Doug Ramsey

    Second-half results showed the U.S. emerging from the 2015-2016 profit recession, and our early read is that the first quarter should show more of the same.

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  • Bonds

    Anatomy Of A Tightening Cycle

    April 07, 2017 BY Chun Wang

    The tapering of QE, clearly a tightening move, complicates the definition of the current tightening cycle.

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