April market action delivered two rare events: a 13-day winning streak in the NASDAQ and a +12% month  in the S&P 500 (trough to peak). Both have historically pointed toward strong forward returns. And yet they could not be more different in how they get there.

In a strategic pivot, Allbirds, Inc. withdrew from the footwear trade to redeploy assets into an AI data center rental business. Its stock jumped 582% within three days. The notion of a “582% blip” prompted us to further explore the phenomenon of lottery stocks and the behavioral-finance research into investors’ appetite for lottery-like payoffs.

The greatest investment risk from the trillions of dollars betting on AI is that overbuilding will lead to excess capacity with competition driving pricing toward marginal costs. Many players are tossing their hats into the ring, but new-era spending booms often end with just a few dominant firms.

Market-based measures are favorable, and the war-driven confidence shock has partially reversed. Despite recent volatility, the employment picture improved a bit, although full-time employment is a persistent reminder that labor market health remains fragile.

We compiled a list of indicators to watch for potential private-credit contagion, sorted into three tiers. The first tier, with the most direct private credit exposure and sensitivity to liquidity risk, is flashing a red flag; whereas the other two are graded as “cautionary” to “okay”—early signs of contagion, but not yet serious.

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Estimated bottom-up operating EPS for the S&P 500 shot 11% higher following results from the first month of reporting. Upward revisions during earnings season have become the norm for the last several quarters—with projections usually inflating in the high single digits from start to finish. Results for the first quarter seem to be different, with an initial spike standing head and shoulders above previous quarters. Forward quarters have moved higher as well and, in total, have dampened a good chunk of the multiple expansion that would normally follow a double-digit surge in the S&P 500.

Read this week's Major Trend. 

Read this week's Major Trend. 

This month’s Leuthold Refresh provides a quarterly update on our factor regime analysis. Factors or styles have historically performed differently under various economic and market conditions, and we have mapped these relationships to identify which factors are best positioned for today’s environment.

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The CPI numbers were either in-line or slightly better than consensus. Our inflation scorecard edges up slightly but remains neutral. It pays to be patient.

For much of the last year, we’ve noted markets have persistently underpriced geopolitical risk, treating it like background noise versus a real threat. Recent events have forced a correction to that stance. Oil, in turn, has reclaimed its function as a geopolitical risk hedge—a role it had abandoned for a long time.

Stocks in the Energy sector have massively outperformed since the Iran war onset; yet prior to that, the fundamentals in this space had already strengthened and the oil price surge is an extra bonus. Expectations have remained low while positive surprises have been delivered, making for a favorable setup.

The index had its worst month since the tariff tantrum one year ago. Yet, a sharp rally on the last trading day took some of the sting out of the March loss; downside estimates narrowed by a similar amount.

There’s been a major return benefit for selling AAPL when it hits a 7% SPX weight and repurchasing after reverting back to a 6% weight. We tracked three options to switch into after a 7% “sell” trigger, holding till a new buy is flagged, and each crushed the approach of holding AAPL through the rotation.

Walmart’s performance and expanding P/E ratio contradicts the Staples sector’s less dynamic results, so either Walmart is commanding a growth premium, or investors are applying different valuation standards across the sector. Either way, count us as skeptical.

The evolution of BDC asset values may shed new light on how much of the bear market in alternative asset management stocks is due to genuine economic risk and how much is fueled by an over-reaction to the software and redemption scare.

Private credit has dominated headlines for all the wrong reasons, devastating alternative asset managers linked to that space. When we see a group of stocks with 30%+ losses in a matter of months, our contrarian “Spidey-Sense” starts to tingle, and we begin to wonder if a bargain is in the making.

Sentiment is generally a contrarian indicator, i.e., extreme optimism foretells lower future returns and vice versa. Yet, there are backdrops in which enthusiastic sentiment coexists with ongoing equity gains.

Read this week's Major Trend

Read this week's Major Trend. 

The launch of Operation Epic Fury on February 28th triggered a 51% surge in WTI crude in just three weeks, reigniting investor fears of economic disruption reminiscent of the 1973 OPEC embargo. As tactical investors, we were curious to see what the historical impact of sharp oil price spikes has been on the stock market and on important macro indicators. This analysis evaluates 15 distinct oil price shock episodes since 1985, each characterized by a greater than 20% price increase within 30 days, to assess the historical impact on equity markets, GDP, inflation, and interest rates.

Read this week's Major Trend. 

Read this week's Major Trend. 

The latest CPI numbers are in-line, but the war complicates the outlook. Our scorecard shifts close to neutral and we recommend a more cautious stance toward inflation.

Read this week's Major Trend. 

Employment growth across sectors is now highly concentrated, indicating the job market is being held up by an ever-dwindling cohort of prosperous industries. Coupled with lackluster growth in 2025, this is cause for concern. Yet, history suggests that relief could be just beyond the horizon.

Dispersion remains elevated among factors, with growth selling off and momentum turning in extreme performance spreads. Low-volatility names finally did well after a long stretch of underperformance.

Those complaining about the “Top 1%” controlling all the wealth may finally be getting some satisfaction. Since Halloween, it has been mostly rough sledding for our five-member “4% Club” contingent.

We tackle the challenge of appraising an investment that doesn’t produce income or cash flow by weighing the price of gold against other familiar investments and concepts that can be quantified—like home prices and inflation.

When bombs fly, the reward for bravery is rarely paid on schedule. We do not think this is the time to heroically outguess geopolitics or to confuse short-term fortitude with long-term clarity.

If the dot-com boom was a tale of public markets eagerly underwriting a technological future and then abruptly withdrawing that support, the AI fervor looks like a story of private capital and corporate balance sheets quietly doing the same—but with far less accountability.

Equity market resilience against war headlines, AI disruption fears, and private credit stress have so far been largely supported by a rare “Goldilocks” macro setup. Enter the three bears: Software stocks, private credit/BDCs, and bitcoin.

With S&P 500 Q4 reporting winding down, estimated operating EPS is now 6.9% higher than at the start of the year.

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The Leuthold Major Trend Index tracks eight sentiment surveys; four from the Conference Board covering consumer confidence and four industry measures of investor convictions. Each of these are contrarian signals, meaning that negative sentiment often relates to stronger equity markets while positive sentiment leads to weaker markets. We periodically review the effectiveness of each signal in the MTI, and this study takes a fresh look at a group of indicators related to consumer confidence and investor expectations.

Read this week's Major Trend. 

Read this week's Major Trend. 

The latest CPI numbers were cooler than the seasonal pattern suggests. Our scorecard continue to suggest a mostly benign inflation picture.