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S&P 500

Jan 08 2020

A Good Year To “Own It All”

  • Jan 8, 2020

It’s no surprise that U.S. Large Caps were the #1 asset class performer in 2019. We were surprised that last year was the only one of the decade in which the S&P 500 won the annual performance derby. Here we review the annual performance of “Bridesmaid” asset class and sector, “Perfect Foresight,” and Lowest P/E sector.

Jan 08 2020

Stocks And GDP

  • Jan 8, 2020

Economists argue the best thing the stock market has going for it is the continuation of the U.S. economic expansion. Maybe.

Jan 08 2020

Waiting For The Stimulus To Trickle Down...

  • Jan 8, 2020

Last year the Federal Reserve dumped historic stimulus onto a full-employment economy and an already richly-valued stock market. The stock market obviously loved it.

Jan 08 2020

A Spectacularly Average Thirty Years

  • Jan 8, 2020

In the spirit of good holiday cheer, we made a partial concession to the True Believers with a December “Chart of the Week” in which we narrowed our stock market valuation analysis to the historically elevated levels of last 30 years.

Jan 08 2020

A Blast From The Past

  • Jan 8, 2020

With 2020 representing The Leuthold Group’s 40th year of publishing Perception For The Professional, we perused the first few Green Books for relevant nuggets from 1981, but the backdrop could not have been more different. Therefore, we instead turned the clock back 20 years, thinking it might yield insights more resonant with today’s environment.

Dec 20 2019

Valuations: An Updated “Modern” Take

  • Dec 20, 2019

An occasional critique of our valuation work is that we consider “too much” market history to form a judgment as to what constitutes “high” or “low.” This type of feedback declined during and after the financial crisis (when historic valuation thresholds were temporarily revisited), but it has become more pointed as the U.S. market has soared to new highs.

 

Dec 13 2019

How Much Should We Pay For Market Momentum?

  • Dec 13, 2019

If the S&P 500 closes in the green today, an RSI "overbought" signal will be triggered.

Dec 06 2019

Risks Still High In The “Median” Large Cap

  • Dec 6, 2019

The relative domination of Mega Caps might leave the impression that valuation of the “typical” (or median) Large Cap stock is reasonable. It’s not. The fall rally leaves all major valuation ratios for the median S&P 500 stock in the top decile of the 30-year history, and above the levels prevailing at the September 2018 market high.

Nov 07 2019

A Short-Term S&P Top?

  • Nov 7, 2019

The short-term path for equities “looks” clearer than at any point in 2019, with economic data having stabilized a bit in the last few weeks, the Fed having cut rates again and resumed balance sheet purchases, and some type of trade deal finally looking more tangible than a 2:00 a.m. Tweet.

Nov 07 2019

Back To Y2K?

  • Nov 7, 2019

The bull market took out another old record last month when the S&P 500 topped the cumulative total return of the 1949-56 upswing. The total return since March 9, 2009, is now 468%. Since the highs of March 2000, the S&P 500 cumulative total return is actually a few basis points behind U.S. 10-year Treasury bonds.

Oct 23 2019

Owning S&P 500 At 2,900 In 2018 Vs. 2019

  • Oct 23, 2019

A look at underlying conditions at each stage of the bull market.

Oct 18 2019

Giving Up The Ghost

  • Oct 18, 2019

The approach of Halloween brings thoughts of jack-o-lanterns, scary movies, and buckets full of candy. The season also marks the time when investors finally give up the ghost on the optimistic, even wishful, earnings forecasts made early in the year.

Oct 11 2019

If Your Team Is Out Of The Playoffs, Here’s A New Gamble

  • Oct 11, 2019

With promised breakthroughs on Brexit and the trade war miraculously occurring on the same day, few pundits now believe the market is anywhere close to an important peak. (A peak in the S&P 500, that is, since peaks occurred long ago in the ACWI, MSCI Emerging Markets, NYSE Composite, Value Line Arithmetic, S&P MidCap 400, and the Russell 2000.)

 

Oct 05 2019

More Yield Curve Musings

  • Oct 5, 2019

The U.S. yield curve inversion has lasted long enough that even a few economic optimists now concede it will ultimately prove significant.

Oct 05 2019

Where Would You Rather Be?

  • Oct 5, 2019

On October 3rd, the S&P 500 briefly traded below the high it made in January 2018 before reversing to close the day higher.

Sep 07 2019

“Too Smooth” Of A Ride?

  • Sep 7, 2019

While investors in Value, Small Caps, and especially foreign stocks might beg to disagree, a key MTI technical measure suggests this decade’s stock-market ride has been almost entirely “pain free.”

Sep 07 2019

Pricing In “Peak” EPS

  • Sep 7, 2019

A recent theme in our valuation work is that we no longer need to assume a full-blown “reversion to the mean” to illustrate current U.S. stock market risks: Even a reversion to “old” bull market highs in ratios like S&P 500 Price/Sales, Price/Cash Flow, and Normalized P/E would result in bear-sized losses.

Sep 06 2019

Factor Trade-Offs

  • Sep 6, 2019

A major difficulty in picking stocks based on quant factors is the need to make trade-offs. A company that looks attractive on one preferred metric will likely look unattractive on another. This study examines the uncomfortable give-and-take that complicates factor investing at the stock level.

Aug 09 2019

The Stock Market’s Clark Kent

  • Aug 9, 2019

Mild-mannered and humdrum on the surface but a superhero underneath—that’s Clark Kent and, in recent months, the Low Volatility factor. Low Vol stocks are unexciting by definition, and the factor’s current holdings focus on utilities, REITs, and insurance companies.

Apr 05 2019

The Cyclical Bull In Perspective

  • Apr 5, 2019

This ten-year boom—one that’s taken the S&P 500 to the second-highest valuations in history—has merely lifted the index to the top end of a channel that’s contained the S&P 500’s 6% annualized gain over the last nine decades.

Apr 05 2019

The “Breakout” And Its Aftermath

  • Apr 5, 2019

A common criticism of our long-term valuation work is that valuations shifted north into a new trading range during the 1990s, meaning Leuthold’s benchmarks (dating back to 1957 and earlier) are no longer relevant.

Apr 05 2019

The P/E Decline Has Been Greatly Exaggerated

  • Apr 5, 2019

The S&P 500 has bounced back to levels seen at the January 2018 spike high, yet is valued more cheaply than it was 14 months ago.

Apr 05 2019

A Confidence Game

  • Apr 5, 2019

Several consumer confidence gauges plunged in the wake of the Q4 market decline (as expected), and then rebounded in a lagged response to the stock market recovery (again, as expected). But March saw the largest one-month drop in consumers’ assessment of their “Present Situation” since 2008.

Mar 22 2019

Partying Like It’s 1998-99

  • Mar 22, 2019

We thought Jerome Powell’s “Christmas Capitulation” would be tough to beat, but he accomplished that two days ago with what could be called his “Spring Surrender.” That, in turn, has rekindled hopes of a stock market melt-up along the lines of 1998-99, which, as old-timers will remember, followed a late-cycle correction that was nearly identical to the one seen last year.

 

Mar 07 2019

A Scary Chart, Revisited

  • Mar 7, 2019

For a couple years, we’ve labeled the S&P 500 Price/Sales ratio as the scariest chart in the Leuthold database, and last year’s decline did little to improve its intimidating appearance.

Mar 07 2019

Time To Jump Back In?

  • Mar 7, 2019

A few pundits have suggested that Jack Bogle’s death in January might prove to be the symbolic capstone to a cycle in which passive investing has completely dominated the full-fee, active money-manager ranks.

Mar 07 2019

The Correction In Historical Context

  • Mar 7, 2019

While it’s too early to let the ink dry on the accompanying table and chart, we’ve decided to add last year’s decline for comparative purposes.

Mar 07 2019

Same As It Ever Was?

  • Mar 7, 2019

February’s Oscar win validated our efforts to make the ‘Green Book’ suitable for all audiences, like our decision to relegate “bottom-quartile” valuation outcomes to the very back of the publication.

Mar 07 2019

Once In A Lifetime?

  • Mar 7, 2019

To paraphrase a talking head and the Talking Heads, someday you might find yourself in a beautiful deleveraging, with beautiful valuations, and you may ask yourself, well, how did I get here?  

Mar 07 2019

Yet Another Anniversary?

  • Mar 7, 2019

We received two media calls in December hoping we would comment for upcoming special features about the tenth anniversary of the bull market. We rolled our eyes.

Mar 01 2019

Assessing The Cyclical Risks

  • Mar 1, 2019

With all the excitement over the Fed’s shift in rhetoric and the excellent subsequent market action, there’s a danger of losing sight of the broader cyclical backdrop for U.S. stocks. Remember, the economy is still operating beyond government estimates of its full-employment potential, and it’s not as if the Fed has actually eased policy—as it did successfully at a similar late-cycle juncture in the fall of 1998 and (ultimately unsuccessfully) in the summer of 2007.

Feb 15 2019

2019 Earnings: Don't Bet On 6%

  • Feb 15, 2019

Currently, the collective intelligence of Wall Street is predicting 6% S&P 500 EPS growth in 2019. It’s also the 61-year average annual growth rate for the index, so how wrong could it be?

Jan 08 2019

Guess-timating The Downside

  • Jan 8, 2019

While our market disciplines remain negative, we certainly aren’t oblivious to the haircut in equity valuations that’s already occurred.

Dec 28 2018

3% Yields Proved To Be High Enough

  • Dec 28, 2018

In September the popular claim was that “interest rates were rising for the right reasons,” and still too low to threaten stocks or U.S. economic expansion.

Oct 26 2018

Assessing The Damage

  • Oct 26, 2018

Our tactical accounts remain positioned very defensively, and we have yet to see the sort of capitulative market action that would lead us to lift any existing equity hedges.

 

Oct 05 2018

Estimating The Downside: The G-Rated Version

  • Oct 5, 2018

The longevity of this bull market is impacting tactical asset allocators in ways great and small.

Sep 08 2018

S&P 500—Valuation Check-Up

  • Sep 8, 2018

In late January we speculated how long it would take for the S&P 500’s bloated valuations to reach more reasonable levels. The S&P 500 now trades back where it was in January and the seven-month break included some of the best growth rates most have ever seen. We found ourselves asking: Did chubby Mr. Market shed any pounds as he pedaled away on his stationary bike?

Sep 08 2018

Breakout Or Fake-Out?

  • Sep 8, 2018

The S&P 500 has fully erased its January and February losses, but there’s probably a market message in the fact that it took so long to do so.

Sep 08 2018

Beware The Breakout

  • Sep 8, 2018

The S&P 500 finally erased the losses from its nine-day swoon in January and February.

Aug 07 2018

Assessing The Correction

  • Aug 7, 2018

How do today’s cyclical conditions stack up with those accompanying other stock market declines?