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Present Situation Index

Aug 05 2022

Confidence Cracking?

  • Aug 5, 2022

The theory of “contrary opinion” is important to market analysis, but so is an understanding of its limitations. When investor-sentiment surveys dipped sharply in late January, we warned that the declines (which are usually signals to “buy”) might instead mark the beginning of an important trend change. 

Mar 17 2022

Special Study: Should You Buy The Dip? Some Statistical Considerations…

  • Mar 17, 2022

The correction in the S&P 500 since its high on January 3rd qualifies as a “severe” correction, which we define as a decline of at least -12% based on daily closing prices. What are the odds that it becomes a “major” decline*—in which the loss exceeds -19%?

In Section I, we review the history of severe corrections since 1950. In Section II, those corrections are analyzed in the context of the economic cycle, consumer sentiment, and other underlying factors—ones that might help us determine if today’s stock-market weakness is “buyable.” 

Feb 05 2022

Too Early For Curve Watching?

  • Feb 5, 2022

Last month, we published a table showing where we thought a variety of economic and financial-market measures lay along the economic recovery “continuum.” Although the upturn has officially entered just its 22nd month, the bulk of those measures looked “late cycle” in nature.

Oct 07 2021

Why Is Confidence “Inverted?”

  • Oct 7, 2021

In a recent “Chart of the Week,” we discussed the late-cycle “inversion” in Consumer Confidence, where consumers’ views of their “Present Situation” have jumped far above their “Expectations.” That’s the reverse of what’s typical in the first couple years of an economic expansion.

Sep 10 2021

Why Is Confidence “Inverted?”

  • Sep 10, 2021

Stimulus and soaring stock prices have contributed to the fastest consumer-confidence rebound of any economic recovery on record. Yet the manner in which this bounce has unfolded is anything but “early cycle.”
 

Aug 07 2019

Altitudes And Attitudes

  • Aug 7, 2019

Trend followers who use the ten-month moving average discipline finally had a positive month in July. But after the early-August decline, they are still holding an S&P 500 loss of 60 points from their latest trade initiated at the end of June.

Aug 05 2019

Leuthold Quick Takes: Getting Sentimental

  • Aug 5, 2019

This issue of Leuthold Quick Takes reviews the conflicted nature of investor sentiment as seen by Doug Ramsey (Chief Investment Officer) and Jim Paulsen (Chief Investment Strategist).

Jul 05 2019

Recession Evidence: How Much Is Enough?

  • Jul 5, 2019

Over a 12-month horizon, we now believe a U.S. recession is very likely, but aren’t confident enough to make the call when the forecast window is cut in half. Second-half stock returns could be decent if the business-cycle peak is still a year away. Then again, there’s peril in waiting for “too much” confirmation of recession.

May 07 2019

It’s A Confidence Game

  • May 7, 2019

U.S. stock funds have seen heavy outflows despite the market’s YTD gains of 15-20%, once again reviving the tired characterization of this bull market as the “most hated in history.”

Mar 29 2019

The Cycle Is Over If Confidence Fades Further

  • Mar 29, 2019

The “Expectations” component of the Consumer Confidence survey has been wobbly in the last few months, but the latest report, released on Tuesday, showed the first meaningful hit to consumers’ “Present Situation” since the stock market first began to struggle 14 months ago (Chart 1).