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Stock Market Internals Earnings Momentum, Small/Mid/Large Caps, Growth/Value/Cyclicals, and Additional Factors

Jan 08 2019

Growth vs Value vs Cyclicals

  • Jan 8, 2019

Our tech-heavy Royal Blue Growth segment faltered toward the end of the year but held up better than any other segment in a rough 2018.

Jan 08 2019

Small Cap vs Mid Cap vs Large Cap

  • Jan 8, 2019

This is the farthest our Ratio of Ratios has dipped into the Small Cap P/E discount zone since 2003.

Jan 08 2019

Earnings Momentum

  • Jan 8, 2019

With Q3 earnings season complete, our Up/Down Ratio stands at 1.85. We’re now left with one quarter of the sweet 2018 vintage to report—but take note of the tough YOY comparison on deck.

Jan 08 2019

Additional Factors

  • Jan 8, 2019

There was a lot less Christmas cheer with the market down 15% through Christmas Eve. The S&P 500 was propped up by a few big firms in 2018. Our 25-Largest firm average ended the year in positive territory and bested the Equal Weighted Average by almost 11%.

Dec 07 2018

Earnings Momentum

  • Dec 7, 2018

Our second Up/Down Ratio of Q3 stands at 1.88—this is the weakest “two-month” reading we’ve seen in the last four quarters. The energy selloff has us thinking about the up/down struggles of the 2014-15 Energy-sector earnings washout.

Dec 07 2018

Small Cap vs Mid Cap vs Large Cap

  • Dec 7, 2018

Small Caps are selling at a 2% valuation discount to Large Caps. Our Ratio of Ratios moved into the Small Cap P/E discount zone for the first time in 15 months.

Dec 07 2018

Growth vs Value vs Cyclicals

  • Dec 7, 2018

Our tech-heavy Royal Blue Growth segment underperformed for the second month in a row. Despite these rare missteps, the group still has a solid YTD return of +8.7%.

Dec 07 2018

Additional Factors

  • Dec 7, 2018

Since the latest trouble began on October 10th, the S&P 500 has experienced gains or losses in excess of 1% in 20 of the 39 trading days. Prior to October 10th, we saw only eight such days during the six month “melt up.” The Equal Weighted Average broke a four-month relative-performance losing streak to the Cap Weighted measure. Over the past 24 months: Cap Weighted +25.5%; Equal Weighted +18.4%.

Nov 07 2018

Earnings Momentum

  • Nov 7, 2018

Our first Up/Down Ratio of Q3 stands at 2.74—the third highest “one-month” figure of the past 34 years. However, it’s by far the lowest “one-month” figure of the past three quarters.

Nov 07 2018

Small Cap vs Mid Cap vs Large Cap

  • Nov 7, 2018

The recent plunge in our Ratio of Ratios is due to significant underperformance in Small Caps. Since the end of August: Russell 2000 -13%; S&P 500 -6%.

Nov 07 2018

Growth vs Value vs Cyclicals

  • Nov 7, 2018

Large Cap Value stocks were the best place to weather last month’s storm as Royal Blue Value lost “only” -6.1%. Small Cap Growth plunged 12.6%.

Nov 07 2018

Additional Factors

  • Nov 7, 2018

After pulling the load for so long, the much loved FAANG stocks proved to be a liability for the index. Coming into the month, the FAANGs accounted for 12.8% of S&P 500 market cap. When October was through, the five firms made up 20% of the losses, wiping out a collective $330 billion (one XOM) in market cap.

Oct 05 2018

Earnings Momentum

  • Oct 5, 2018

We’ve reached the halfway point of the 2018 corporate earnings bonanza! The final Up/Down Ratio for Q2 2018 stands at 2.06—the highest “three-month” figure we’ve seen since 1984.

Oct 05 2018

Small Cap vs Mid Cap vs Large Cap

  • Oct 5, 2018

The sharp divide in performance between Small Caps and Large Caps moved our Ratio of Ratios below the long-term median premium for the first time in seven months.

Oct 05 2018

Growth vs Value vs Cyclicals

  • Oct 5, 2018

Growth stretched its fantastic contemporary outperformance run to seven quarters, besting Value stocks once again. Since the end of 2016: Royal Blue Growth +53%; Royal Blue Value +21%.

Oct 05 2018

Additional Factors

  • Oct 5, 2018

The S&P 500 posted its best quarterly price gain (+7.2%) since the fourth quarter of 2013. However, 37% of the year-to-date returns have come from three stocks: Amazon, Apple, and Microsoft. Those three firms have added a combined $737 billion in market cap since the start of the year.

Sep 07 2018

Additional Factors

  • Sep 7, 2018

The modest January air pocket went completely unnoticed by the index’s largest firms. Between the market peaks, Microsoft, Apple, and Amazon gained 15%, 26%, and 36%, respectively—adding a combined $495 billion to their market values.

Sep 07 2018

Growth vs Value vs Cyclicals

  • Sep 7, 2018

After a brief surge in July, the seemingly-cursed Value stocks quickly resumed their roles as underperformers. Our Royal Blue stock lists (institutional favorites) continue to stretch their valuations higher.

Sep 07 2018

Small Cap vs Mid Cap vs Large Cap

  • Sep 7, 2018

Since the end of February—the last month Small Caps were under the historical 3.5% valuation premium—the Russell 2000 has outperformed the S&P 500: +16% versus +8%, respectively.

Sep 07 2018

Earnings Momentum

  • Sep 7, 2018

The second month of Q2 earnings gives us an Up/Down Ratio of 2.08. This is the highest “two-month” reading of the current tax-reform-juiced-earnings era but a bit of a disappointment given our “one-month” figure.

Aug 06 2018

Earnings Momentum

  • Aug 6, 2018

As we digest the first round of Q2 earnings reports, our Up/Down Ratio sports another outrageous reading of 3.67. If you need a chart to make a case for peak earnings growth, here you go.

Aug 06 2018

Small Cap vs Mid Cap vs Large Cap

  • Aug 6, 2018

The recent run up in Small Cap stocks, coupled with a less rosy (though still fantastic) trailing earnings profile, has given us the largest Small Cap premium we’ve seen in three years.

Aug 06 2018

Growth vs Value vs Cyclicals

  • Aug 6, 2018

Our Royal Blue Low P/E Tier finally outperformed the High P/E Tier for the first time since November. YTD, Value stocks still lag Growth in all market cap tiers.

Aug 06 2018

Additional Factors

  • Aug 6, 2018

The index, still a bit shy of its all-time closing high, did set a new total return high on July 25th—six months after the trouble began in January. The FAANG stocks had some divergent components in July  but still provided a big boost for the S&P 500.

Jul 07 2018

Earnings Momentum

  • Jul 7, 2018

Wrapping up Q1 reporting, our Up/Down Ratio is flying high at 2.00. This is the highest “three-month” figure since 1996, even besting those readings immediately following the Great Recession.

Jul 07 2018

Small Cap vs Mid Cap vs Large Cap

  • Jul 7, 2018

Our Ratio of Ratios has been stuck in the Small Cap premium range of 2% to 7% for the last ten months—limiting the ability to make a call on market cap preference with this vignette.

Jul 07 2018

Growth vs Value vs Cyclicals

  • Jul 7, 2018

Growth stocks maintained their dominance over Value in Q2. This outperformance has finally leveled relative historical valuations between Value and Growth.

Jul 07 2018

Additional Factors

  • Jul 7, 2018

Small Caps zoomed ahead of Large Caps the last four months. Couple this with the top-25 largest S&P 500 firms still charging higher and we have a very interesting “barbelled” performance profile.

Jun 07 2018

Earnings Momentum

  • Jun 7, 2018

After Q1’s record breaking “one-month” figure, our “two-month” reading could only disappoint. Still,  May’s Up/Down Ratio of 2.01 is one of the highest “two-month” figures in 35 years of observations.

Up/Down Earnings: A Little Shrinkage

 

Jun 07 2018

Small Cap vs Mid Cap vs Large Cap

  • Jun 7, 2018

Other than an initial bump in the Small Cap premium in March, Small Caps’ last three months’ outperformance hasn’t manifested itself in this vignette.

Jun 07 2018

Growth vs Value vs Cyclicals

  • Jun 7, 2018

Growth’s year-and-a-half dominance over Value continues to roll on. Growth’s substantial gains have almost erased Value’s long-standing relative valuation premium.

Jun 07 2018

Additional Factors

  • Jun 7, 2018

Like a thirty-year-old still living with his parents, the market doesn’t seem to have much direction. Since 1950, the median recovery time (if the market does indeed recover) from an intermediate correction is just 33 trading days. We’re now going on 80 trading days since the low set on February 8th… tick tock.

May 04 2018

Earnings Momentum

  • May 4, 2018

Our first Up/Down Ratio based on 2018 earnings sports a mind-blowing reading of 3.22—the highest “one-month” figure in 35 years of data.

May 04 2018

Small Cap vs Mid Cap vs Large Cap

  • May 4, 2018

This observation falls neatly in the middle of our 2% to 7% Small Cap premium range we’ve observed over the last eight months—providing no real “call” for this vignette.

May 04 2018

Growth vs Value vs Cyclicals

  • May 4, 2018

Beaten-up Small and Mid Cap Value stocks performed the best during April. In the Mega Cap space, however, Growth continued to outperform.

May 04 2018

Additional Factors

  • May 4, 2018

Compared to the first three months of 2018, April turned out to be a bit of a snoozer for the S&P 500.  One corner of the index did have a little excitement—Energy stocks. Yes, Energy stocks. The beaten- down, shriveled up sector had its best monthly performance in three years (+9.4%).

Apr 05 2018

Earnings Momentum

  • Apr 5, 2018

Our Up/Down Ratio sports a towering reading of 1.79, which is the highest our “three-month” ratio has been since the exit of the Great Recession.

Apr 05 2018

Small Cap vs Mid Cap vs Large Cap

  • Apr 5, 2018

Small Cap outperformance helped boost the Ratio of Ratios up from a 2% premium at the end of February. This is the first month our Large Cap P/E ratio has been below 20x since the end of April 2016.

Apr 05 2018

Growth vs Value vs Cyclicals

  • Apr 5, 2018

Growth has outpaced Value in each market cap tier for five quarters in a row. Our Royal Blue High P/E Tier was the strongest performing segment of Q1 and outperformed the Low P/E Tier by a spread of 6.7%.

Apr 05 2018

Additional Factors

  • Apr 5, 2018

The index had a quarterly loss for the first time since Q3 2015. Volatility—which had been pretty much non-existent for all of 2017—returned and even had the nerve to persist. With mega caps teetering in March, the Equal Weighted Average scored its fourth monthly win in the last year.