Recent Publications

All six regional activity indexes we follow declined in November, but held in positive territory. Pending home sales off slightly, although volume suggests continued strength in home sales in the near-term.

Top-level model rose to 86% stock allocation. Highest allocations are with U.S. Growth, U.S. Small Caps, and Emerging Markets. The global equity market participation indicator switched to favoring stocks.

Breadth thrusts this year are still in effect. Under breadth thrust buys, momentum usually trumps sentiment. Thus, we adjust DAVIS265 for breadth thrusts.

Despite sitting at the intersection of several popular themes (5G, IOT, Cloud), 5G Network Infrastructure's declining sales growth and deteriorating margins coupled with recent price action keeps us cautious about this group.

Apple mobility data shows the economy is clearly slowing. But, Leading/Coincident indicator stays on April buy signal. Housing is booming and a vaccine is coming, so the slowdown should be temporary.

A decline in income, a pullback in sentiment, and rising jobless claims pose a risk to spending growth and the recovery. New home sales off slightly, but level still close to highest since 2006. Durable goods orders up, as factory activity continues to improve. State conditions still broadly positive. Recession odds remain low. Corporate profits surge in Q3, bolstered by PPP and other government help.

A decline in income, a pullback in sentiment, and rising jobless claims pose a risk to spending growth and the recovery. New home sales off slightly, but level still close to highest since 2006. Durable goods orders up, as factory activity continues to improve. State conditions still broadly positive. Recession odds remain low. Corporate profits surge in Q3, bolstered by PPP and other government help.

Tesla will be the second-largest company in S&P 500 Consumer Discretionary after Amazon. Risk measures like market beta and volatility will be higher following the addition of Tesla to the sector. Consumer Discretionary will likely begin 2021 as most overbought among all sectors.

We initiate a trade to overweight Emerging relative to Developed Markets on a bullish trend with improving breadth and relative PE expansion.

Updating factor recommendations to include earnings revisions and cash position. Select companies based on the cash position, long-term eps growth/eps stability, price momentum, earnings revisions, and free cash flow/enterprise value. Favored stocks include: Apple, Microsoft, Facebook, Home Depot, Thermo Fisher, Bristol-Myers.

S574A rises to excessive optimism. Individual investors join the party. Update on foreign investors over the last year - record buying.

We provide our quarterly economic update of the world's major countries and regions. Although the vaccine news is positive, many of the world's economies will get worse before they get better due to a resurgence in the virus and waning stimulus. Growth trends favor China, while Europe remains the weak link.

Consumer confidence declines, raising the risk the recovery is slowing. But house prices continue to accelerate. Richmond Fed regional activity loses some momentum.

Consumer confidence declines, raising the risk the recovery is slowing. But house prices continue to accelerate. Richmond Fed regional activity loses some momentum.

We project 2.2% CPI inflation in 2021. A vaccine, firmer consumer demand, and some supply shortages push up price growth. But a large output gap, labor market slack, and subdued private sector credit demand exert downward cyclical price pressures.

The NDR S&P 500 Cycle Composite for 2021 suggests a stronger first half, and a weaker second half. The size of any COVID relief, infrastructure, or health care packages could determine if 2021 follows the cycle composite. A second-half peak would align with the median post-recession cyclical bull of 16 months.

Neutral on Value versus Growth. Positive technical and economic developments are offset by a challenging yield and long-term macro-economic environment. Rising yields and a steepening yield curve would be positive for Value.

Neutral on Value versus Growth. Positive technical and economic developments are offset by a challenging yield and long-term macro-economic environment. Rising yields and a steepening yield curve would be positive for Value.

Market shrugs on MLF expiration. Led by the Revenue sector, tax-free bonds have outperformed taxables. Within the Revenue sector, Transportation and Hospitals are leading. We introduce our Municipal Bond Catalog.

Markit PMIs show private business activity strengthening. CFNAI confirms continued growth in early Q4. Equipment finance industry confidence up.

Markit PMIs show private business activity strengthening. CFNAI confirms continued growth in early Q4. Equipment finance industry confidence up.

Surge in stocks above their 10- and 40-week moving averages gets close to 90%. NDR's Dow Theory remains bullish. But, FANMAG is a possible new non-confirmation.

Increasing adoption as an alternative currency has pushed Bitcoin near its all-time highs vs USD and EUR.

The coming vaccine (and others) should be a game changer for 2021. Yet, high debt will weigh on growth longer-term. Organic income growth (less government transfer payments) is just slightly positive. Employment trends and lending standards have a way to go.

Increasing overweight stock exposure, dropping bonds to underweight. After 5% shift, recommended allocation is now 65% stocks (10% overweight), 30% bonds (5% underweight), and 5% cash (5% underweight). Decisive broadening evident across markets, sectors, global equities, and more.

LEI up by the least in six months. Existing home sales hit highest level since 2006. Philly Fed manufacturing activity and outlook moderate. Initial jobless claims increase. But consumer comfort still rises.

LEI up by the least in six months. Existing home sales hit highest level since 2006. Philly Fed manufacturing activity and outlook moderate. Initial jobless claims increase. But consumer comfort still rises.

Commercial traders are at a near-record net long position in T-bond futures, historically bearish for Banks. 10yr-6mo yield curve remains flat compared to past economic recoveries. Despite the COVID environment, interest rates are still a driving factor of Banks' performance.

Global economic data has been surprising less to the upside in recent months. But our analysis finds that net positive readings, whether rising or falling, have historically been associated with positive equity market performance. EM data, led by Asia, continues to see surprises in an uptrend.

Economic liquidity is one of our favorite fundamental indicators, combining monetary and economic analysis. A new version of liquidity uses more timely inputs and a broader gauge of economic activity. The indicator shows fading support for financial markets.

We expect 4.6% real GDP growth in 2021. COVID surge slowing the economy in late 2020 and early 2021. But a vaccine and potential fiscal stimulus boost the growth outlook later on. S&L government budget pressures, expiring benefits, and a slow labor market recovery are notable headwinds.

Housing starts up, led by single-family. Architecture billings still shrinking, but outlook improves.

Housing starts up, led by single-family. Architecture billings still shrinking, but outlook improves.

We initiate a trade of overweighting small-caps relative to large-caps following NDR Chief U.S. Strategist Ed Clissold's bullish call on small-caps.

Removing balance sheet liquidity and lower volatility factors. Pick stocks based on price momentum, earnings quality, interest coverage, asset efficiency, and shareholder yield. Selected stocks include: Nestle, Novo Nordisk, Unilever, Kone Oyj, DSV Panalpina, Sika, Sandvik, GlaxoSmithKline, Reckitt Benckiser, Ferguson, Intertek Group, Next.

Our short-term sentiment model on DAVIS265 shows excessive optimism. Funds flows into ETFs also show excessive optimism. Cyclical measures of cash show it is very underweight.

Economic and stock market cycles remain bullish for small-caps relative to large-caps. Small-caps have more earnings rebound potential and are cheap relative to large-caps. Trend and breadth indicators are confirming small-caps' uptrends in both absolute and relative strength terms.

Retail sales rise in Q4 by the least in six months. Industrial production up, but still lower than pre-recession. Builder confidence posts a new record high. Business inventories rise.

Retail sales rise in Q4 by the least in six months. Industrial production up, but still lower than pre-recession. Builder confidence posts a new record high. Business inventories rise.

In Europe and Japan investors will need to take more equity risk to achieve return objectives. In the U.S., expect lower returns from stocks and bonds resulting in a parallel shift of the efficient frontier. Having a heavy allocation to equities is not always the best solution.

New all-time highs for equity ETFs (IWM, DIA, RSP) and new all-time relative lows for popular bond ETFs (BND, HYT). Largest weekly inflows to equity ETFs and largest weekly outflows from commodity and inverse equity ETFs in a year. Popular thematic ETFs (CLOU, QCLN, LIT) continue to see large, positive flows.

Slower factory activity growth in the region, but positive outlook for the near-term.

Slower factory activity growth in the region, but positive outlook for the near-term.

S270 gives an overbought sell signal. But, the Moving Average Model is still on a buy. There are still few new lows and the NYSE A/D line is at new record highs. There was a bullish breadth thrust from our Three-Day Price Thrust Indicator.

Subdued PPI inflation amid large output and labor market slack. Consumer sentiment slides as COVID health crisis worsens. Budget deficit continues to swell.

Subdued PPI inflation amid large output and labor market slack. Consumer sentiment slides as COVID health crisis worsens. Budget deficit continues to swell.

EM bond funds are the best performing bond funds over last month. USD weakness and commodity strength is positive for EM bonds. Local-currency bond ETFs benefiting from EM currency strength.

Continued outperformance of gold over bonds will build conviction for commodity and emerging market themes over consumer-related themes in 2021.

The Fab Five Monetary Component is extremely friendly. The Fed is providing record amounts of excess economic liquidity and near record low interest rates. Election - historical studies argue government gridlock is not bad for stocks, and there is upside potential from gloomy Democrats and Independents.

Maintaining bullish gold position. Watching trend, sentiment, interest rates, dollar and secular developments. Gold Watch aggregate describes bullish indicator evidence.

Monday's vaccine news triggered the biggest one-day outperformance by Value over Growth on record. Our trend models are mixed, so we are maintaining our neutral tactical recommendation on Growth versus Value. We continue to expect an eventual rotation to Value as the economy fully reopens.

We examine the pandemic's possible impact on the labor force, aging population, birth rates, and migration. Based on these factors, the pandemic is likely to drive down long-term labor force trends, particularly in the developed world. This will have negative implications on potential real GDP growth.

Downgrading Technology to marketweight and upgrading Energy and Real Estate to marketweight. Position changes are made in anticipation of a multi-month rotation to Value. Additional moves toward Value will depend on model confirmation.

CPI inflation remains weak, despite a pickup in consumer commodity prices. Jobless claims continue to recede, but level still far above pre-recession normal. Consumer comfort up slightly.

CPI inflation remains weak, despite a pickup in consumer commodity prices. Jobless claims continue to recede, but level still far above pre-recession normal. Consumer comfort up slightly.

Adding commodities or gold produced better blends during inflationary periods but inferior mixes during disinflationary periods. The optimal blend depends on getting the macro inflation call right. REITs performed well during both periods but face structural challenges.

The treasury curve may continue to steepen absent Fed intervention benefitting banks and hurting long-term treasurys. Gold remains in an uptrend with the recent pull-back offering traders an opportunity to get in with well-defined risk. Energy's sharp counter-trend bounce alleviated some over-sold tension but higher oil prices will be needed for it to continue.

The Fab Five Sentiment Component is neutral. DAVIS265 gave a nice warning on October 12, but did not get fully oversold before the latest rally. Median P/E is about as bearish for valuations as it can be. However, some 68% of S&P 500 stocks yield more than 10-year Treasuries. Watching stock offerings.

Cautious small biz optimism amid election and pandemic uncertainty. Job openings still far below pre-recession level.

Cautious small biz optimism amid election and pandemic uncertainty. Job openings still far below pre-recession level.

Tighter restrictions across Europe coupled with stimulus will most likely curb the spread of the virus and offer support for equities. Extreme pessimism as measured by the European Sentiment Composite suggests equities became oversold. Leadership from economically sensitive sectors, even before yesterday's news of a vaccine breakthrough, is constructive for European equities.

Upgrading HY and EM to overweight from marketweight. Downgrading Treasurys to underweight. Reduced uncertainty, vaccine progress, and better technicals support move.

ETI gains continue for sixth straight month, but at a slower pace. OECD U.S. CLI up, as the economy continues to claw its way back from recession.

ETI gains continue for sixth straight month, but at a slower pace. OECD U.S. CLI up, as the economy continues to claw its way back from recession.

Dividend Payers are exiting their least favorable phases of the economic and stock market cycles. Dividend Payers are the most oversold versus Non-Payers in a decade. Focus on balance sheets for dividend stock selection, since COVID could lengthen the dividend cutting cycle.

The Fab Five Composite is bullish. The Fab Five Tape Component leans bullish. But, the tape is extended longer-term. Watch the High-Low Logic and Big Mo Tape signals.

Job gains better than expected. Unemployment rate tumbles more than our optimistic forecast. Government employment continues to act as a drag. Small chance of large stimulus increasing pressure on the Fed to do more.

Job gains better than expected. Unemployment rate tumbles more than our optimistic forecast. Government employment continues to act as a drag. Small chance of large stimulus increasing pressure on the Fed to do more.

Recent performance by Managed Health Care and Health Care Services stocks suggests investors are more concerned with companies' top-line growth than Congressional make-up or pending Supreme Court Ruling.

Right now, I believe hedging stocks should include bonds and gold. This could be good, because one is historically a deflation hedge and one an inflation hedge. Bonds and stocks have little correlation long-term, but they have been negatively correlated over the last 20 years. Bonds look "overvalued" with absolute yields near record lows, but relative yields and sentiment argue there may still be an upside.

We analyze 12 sub-cycles and the overall cycle. The economy rebounded strongly in Q3, with most sub-cycles in expansion, supported by large monetary and fiscal stimulus.

Changes could come as soon as the next FOMC meeting. At a minimum, expect a shift toward more longer-dated securities and higher TIPS ownership. Fed to extend Main Street and Municipal liquidity facilities.

After breadth thrust signals, watch for longer-term confirmation. Also watch for confirmation from economically sensitive risk-on proxies. Commodities, Financials and bond yields also warrant attention in assessing reflation confirmation.

Both the services and manufacturing PMIs rose to new highs in October, shrugging off a record surge in global COVID cases. But the headline numbers mask underlying issues, especially in the services sector. EMs and the U.S. reign for now, Europe remains in trouble.

Nonfarm productivity up in 1H 2020 by most since 1965. Unit labor costs decline. Layoff plans and jobless claims fall, but levels still above pre-recession. Light vehicle sales hit a ceiling.

Nonfarm productivity up in 1H 2020 by most since 1965. Unit labor costs decline. Layoff plans and jobless claims fall, but levels still above pre-recession. Light vehicle sales hit a ceiling.

Tech megacaps were the biggest drag on the S&P 500 in October. Utilities and Industrials could see investor enthusiasm wane with a split Congress. We have put Technology on watch for a downgrade and Health Care on watch for an upgrade.

ISM NMI off slightly in October, but Markit Services PMI rises. Both indicate continued growth in early Q4. ADP payrolls growth moderates, a sign of slowing labor market recovery. Trade gap narrows in September, but 12-month total deficit still growing.

ISM NMI off slightly in October, but Markit Services PMI rises. Both indicate continued growth in early Q4. ADP payrolls growth moderates, a sign of slowing labor market recovery. Trade gap narrows in September, but 12-month total deficit still growing.

Thematic investors positioned for a clean Democrat sweep in October, but the failure of Democrats to gain control of the Senate puts some positive returns at risk.

Unlike 2000, the financial markets priced in uncertainty over the presidency before the election. Tax hikes appear less likely with Republicans probably retaining the Senate. Without infrastructure, tax, or regulatory changes, the secular environment would continue to favor Growth over Value and large-caps over small-caps.

S&P 500 price-to-sales at record highs. S&P 500 total and median price-to-earnings are far above fair value. Margin debt and NASDAQ price-to-earnings are extremely high. Advisory service sentiment and 40-day put/call ratio suggest high risks.

Trump's economic policies pre-COVID expanded the labor force and broadly improved labor market conditions. The trade war spiked economic policy uncertainty and weighed on capex. Tax cuts expanded the budget deficit.

Factory orders continue to improve, in tandem with broad manufacturing activity. NYC services activity strengthens.

Factory orders continue to improve, in tandem with broad manufacturing activity. NYC services activity strengthens.

Credit is presenting a mixed picture. It held up reasonably well last week amid weaker equities. On the positive side, the CMI hit its best level since 2004 and breadth momentum remains favorable. On the negative side, funds are running down cash levels, outflows and volatility have increased, and the sustainability of global growth has been questioned.

Broad-based increase in factory activity, as economic recovery continues in early Q4. Construction spending up only slightly, as private nonresidential and public construction fall. Bankruptcy filings still near historic lows.

Broad-based increase in factory activity, as economic recovery continues in early Q4. Construction spending up only slightly, as private nonresidential and public construction fall. Bankruptcy filings still near historic lows.

A rebound in commodity prices since March fuels expectations of reflation. A steepening yield curve, which tends to be associated with rising commodity prices, supports that outlook. But a new COVID wave poses a risk to the cyclical uptrend.

Top-level model fell to 72% stock allocation. Highest allocations are with U.S. Growth, U.S. Small Caps, and Emerging Markets. The global shipping rates indicator switched to favoring bonds.

Smaller companies have traded sidewise to defensive since the end of 2017. The post-election stock market does better when a Republican incumbent is reelected. COVID-19 looks slightly similar to the 1918 Spanish Flu, but deaths are far less.

Income and spending surprise up in September, but risks to the outlook persist. PCE inflation remains weak. Softer ECI implies downward price pressures. Consumer sentiment up modestly in October. Regional manufacturing activity continues to expand.

Income and spending surprise up in September, but risks to the outlook persist. PCE inflation remains weak. Softer ECI implies downward price pressures. Consumer sentiment up modestly in October. Regional manufacturing activity continues to expand.

Emerging Market ETFs recently broke-out to multi-year highs on a weekly closing basis. EM economies' lower reliance on services creates a positive macro backdrop. A breakout from EM's long-term relative downtrend would add additional bullish evidence.

Q3 PCE shows large drops in leisure services and energy spending are fueling purchases in housing, autos, and food at home. Our demographic research causes us to be bullish on housing and autos long-term, while COVID/social distancing causes us to be bullish near-term. Over the intermediate term, we view pullbacks in housing and auto as buying opportunities.

Housing is booming, with record low supply, record low mortgage rates, and 3 million millennial households expected over the next 10 years. But, a lot of good news on macro fundamentals could be priced in. Historically, the average stock struggles at that point. Debt and government spending are at record highs. We could be in a new MMT era, but in the old world, this was ugly news for growth.

Dollar downtrend intact, consistent with uptrends of gold and relative strength of emerging markets. EM trend supported by emerging currency recovery. Mexican Peso and South African rand especially promising, correlating with rising metals. With dollar dropping along with strength in gold, commodities, EM equities and emerging currencies, secular bear consistency would strengthen.

Real GDP rebounds sharply in Q3, but the level of output is still well below pre-COVID. Jobless claims decline, but still far from normal. Consumer comfort deteriorates. Pending home sales off slightly, but y/y momentum strong.

Real GDP rebounds sharply in Q3, but the level of output is still well below pre-COVID. Jobless claims decline, but still far from normal. Consumer comfort deteriorates. Pending home sales off slightly, but y/y momentum strong.

The eurozone recovery shows how easily COVID can take an economy from top to bottom. As new restrictions are enforced, services have gone negative, with pressures rising for businesses as a whole. The economy is flirting with the possibility of a double-dip recession.

Real Estate and Utilities have become less rate sensitive during the pandemic, while Staples has maintained its negative correlation. The economy and the election have taken on more importance in driving bond proxy returns. We have Utilities on watch for an upgrade.

We introduce the Euro-Area Financial Conditions Index to help gauge European monetary policy. The index has correlated well with peripheral spreads. We also introduce our European Corporate Credit Catalogue.

Emerging market ETFs recently broke-out to multi-year highs on a weekly closing basis. USD weakness and EM economies' lower reliance on services creates a positive macro backdrop. A breakout from EM's relative downtrend would move us to decidedly bullish on the region.

Smaller goods trade deficit in September, but still a negative contribution to Q3 GDP growth. Mortgage applications up slightly. Net job losses in Q1 were the worst since the Great Recession.

Smaller goods trade deficit in September, but still a negative contribution to Q3 GDP growth. Mortgage applications up slightly. Net job losses in Q1 were the worst since the Great Recession.

Price momentum outperforms as the bull market matures. Select companies based on the current ratio, long-term eps growth/eps stability, price momentum, EBIT/assets, and free cash flow/enterprise value. Favored stocks include: Apple, Facebook, Visa, Thermo Fisher, Oracle, Accenture, Activision, CSX, Vertex, Dollar General, Moody's

Bloomberg Consumer Comfort has record surge. Michigan Consumer Expectations also has a big jump. Near record buying of U.S. stocks by global investors.

U.S. COVID-19 cases hit record highs, but COVID leaders have not been outperforming to the same degree as during previous spikes. Risk-on assets have been mixed, with small-caps and Treasury yields near multi-month highs. Other factors, such as the election, appear to have a bigger influence than in previous spikes.

Rising durable goods orders point to continued manufacturing recovery. Consumer confidence off slightly. Recessionary fears still linger. Existing home price growth accelerates, as housing inventory remains tight. Richmond Fed regional activity surges.

Rising durable goods orders point to continued manufacturing recovery. Consumer confidence off slightly. Recessionary fears still linger. Existing home price growth accelerates, as housing inventory remains tight. Richmond Fed regional activity surges.

Bonds have worked well as hedges against equity market declines over the past 20 years. But the ability of bonds to perform that function with low nominal and real yields is being questioned. Some investors are investigating new hedges for their equity positions.

New home sales still close to highest level since December 2006. Inventories historically tight. CFNAI shows the economic recovery is moderating. But Texas factory activity continued to strengthen.

New home sales still close to highest level since December 2006. Inventories historically tight. CFNAI shows the economic recovery is moderating. But Texas factory activity continued to strengthen.

Elite Eight stocks are in a strong uptrend, but it looks like a bubble and they failed to make a new high in October rally. Sales and earnings are rallying even in a recession, but valuations may be excessive. But, growth has slowed. The law of diminishing returns could be at work. Even if fundamentals catch up to prices, stocks still have a concentration (crowd) risk.

The trend of outsourcing data centers to cloud infrastructure companies rages on. In this report we focus on Cloud Infrastructure as a theme, where Amazon AWS and Microsoft Azure are the dominant leaders. We initiate this theme with a 'coverage only' rating, though we are long-term bullish. We believe overly bullish sentiment for the group peaked on September 2 and could turn even more negative, creating a better entry point.

The flash U.S. services and manufacturing PMIs rose to their best levels in over a year and a half. Despite some near-term concerns about the upcoming elections, the future looks bright amid expectations of more stimulus. State coincident indexes confirm low recession probability.

The flash U.S. services and manufacturing PMIs rose to their best levels in over a year and a half. Despite some near-term concerns about the upcoming elections, the future looks bright amid expectations of more stimulus. State coincident indexes confirm low recession probability.

The NDR MultiCap Biotech industry has exhibited recent weakness and sits just above technical support. Improvement for the group may be contingent on discovery of a COVID vaccine.

Political judgement has often been a risky market strategy. But, markets often rally after the election uncertainty is cleared up. A lot of Democrats and Independents are pessimistic currently, so they could turn more comfortable should Biden win. If Democrats should win, favor clean energy and infrastructure, and fade defense, coal, and offshore drilling.

Watching for reflation signs from bond yields and relative strength of Financials, the cheapest sector. Commodity advance broadening with rising inflation expectations. Performance on year-end rally could have longer-term implications.

China's stellar recovery, led by business spending, has allowed the economy to quickly recuperate its COVID losses. The consumer/services continues to lag, but China's lower dependency on the sector puts it at an economic advantage. China remains the world's export powerhouse, but even a Biden presidency poses risks.

Homebuilders have benefitted from low rates, strong demand, and tight supply. Despite the recent run, Homebuilding valuations do not look extreme, and millennials could help drive the next leg up. Waning stimulus and government housing programs, high unemployment among the young, and falling affordability are risks for homebuilders.

Existing home sales hit highest level since May 2006. Leading indicators point to continued, but slower, recovery. Jobless claims decline, although level is still far from normal. Consumer comfort weakens.

Existing home sales hit highest level since May 2006. Leading indicators point to continued, but slower, recovery. Jobless claims decline, although level is still far from normal. Consumer comfort weakens.

The Fed's corporate credit facilities allowed companies to issue new debt, refinance their existing debt at lower rates, and extend maturities. IG duration is the longest since the late 1970s. Corporate spreads are trading near their historical norms. High yield is less susceptible to interest rate risk and is a better way to play improvements in credit.

A slower decline in architecture billings bodes well for nonresidential construction spending in 2021. Mortgage applications mixed, but activity still points to housing market strength.

A slower decline in architecture billings bodes well for nonresidential construction spending in 2021. Mortgage applications mixed, but activity still points to housing market strength.

Price momentum has been the top performing factor over recent weeks. Favor stocks with stronger price momentum, liquid balance sheets, higher interest coverage, and lower volatility. Selected stocks include: LVMH, Schneider Electric, Volvo, Legrand, Akzo Nobel, SGS, Rio Tinto, Anglo American, Ferguson, Antofagasta, Halma.

S&P 500 price-to-sales hits record high. Stock market values compared to gross domestic income (GDI) are at record highs. DAVIS265 hits excessive optimism.

Biden's proposed capital gains tax hike would be among the biggest in history. Market returns have been mixed following the four previous capital gains tax hikes. The secular backdrop is likely a bigger driver of equity returns, with tax rates being only one factor.

Housing starts and permits rise, led by single-family. CEO confidence surges at the end of Q3.

Housing starts and permits rise, led by single-family. CEO confidence surges at the end of Q3.

Fed and fiscal stimulus delayed bankruptcy filings in Q2. But they will likely rise in the coming quarters. Higher leverage and tighter lending standards put small firms at greater risk of bankruptcy than large corporations. But a surge in new business applications suggests the economic recovery should endure.

Beware of the Crowd at Extremes is a key tenet at NDR. Reading sentiment, however, can be tricky. Today is one of those confusing junctures. Fed policy is driving short-term complacency, but also longer-term pessimism.

Record high builder confidence bodes well for housing starts in the near-term. But capex sentiment weakens.

Record high builder confidence bodes well for housing starts in the near-term. But capex sentiment weakens.

Lack of new lows is a very healthy sign. As is another breadth thrust buy. Economic trends are bullish after an April buy signal from the ratio of the leading to coincident indicator, but consumer comfort is only about half-way back. Some unemployment benefits are starting to run out.

Broad-based jump in retail sales supports the economic recovery. But industrial production declines, led by energy output. Consumer sentiment and CFO optimism rise, but worries about the outlook persist. I/S ratio remains depressed, as businesses have yet to start rebuilding inventories.

Broad-based jump in retail sales supports the economic recovery. But industrial production declines, led by energy output. Consumer sentiment and CFO optimism rise, but worries about the outlook persist. I/S ratio remains depressed, as businesses have yet to start rebuilding inventories.

NextEra Energy has benefitted from investors' positive views on renewable energy however now it is the largest and one of the most expensive stocks in the sector. Investors should remember it is still primarily a regulated utility.

We will have a booming Q3 in growth. Deficits and money supply are through the roof. Yet, K-shaped recovery is probable.

Upgrading equities from marketweight to overweight, downgrading bonds from overweight to marketweight. Recommended allocation is now 60% stocks (5% overweight), 35% bonds (marketweight), and 5% cash (5% underweight). Responding to indicator improvement and model, we are positioned for year-end rally, but longer-term secular outlook remains in question.

House prices all over the world have remained resilient, despite the usual weakness experienced during major global recessions. Stimulus, supply constraints, and job retention among the high skilled have helped lift prices. There's reason to believe that the sector's resiliency will last, but it will likely promote more inequality.

Health Care and Technology are expected to see operating EPS growth accelerate in Q3. Most cyclical Value sectors are not expected to see meaningful growth until 2021 when comps get easier. Additional fiscal stimulus looks priced in for many cyclical Value sectors.

IYT broke out to all-time highs on positive asset flows. The group has benefited from positive economic developments. Excessive valuations and near-euphoric optimism argue for wait and see.

Initial jobless claims still more than four times higher than pre-pandemic level. Factory activity in the Philadelphia and New York regions continues to normalize. Import prices up slightly, led by nonfuel industrial supplies and materials. But inflation broadly subdued.

Initial jobless claims still more than four times higher than pre-pandemic level. Factory activity in the Philadelphia and New York regions continues to normalize. Import prices up slightly, led by nonfuel industrial supplies and materials. But inflation broadly subdued.

Introducing new coverage of municipal bonds by geography and revenue bonds by sector. Saves time by allowing analysts and PMs to focus on evolving trends. Large differences in market structure between investment grade and high yield.

Trend and recent breakout to new all-time highs are positive developments. Macro trends also positive. But valuations and sentiment argue for wait and see.

Producer prices rise more than expected in September. But annual inflation remains subdued. Lack of pipeline inflation pressures.

Producer prices rise more than expected in September. But annual inflation remains subdued. Lack of pipeline inflation pressures.

Relatively smart money commercials had been long stock index futures, but are now short. Hedge Funds have gone to record shorts on T-bond Futures. Record number of IPOs since the mid 1990s.

We are upgrading our intermediate-term outlook on U.S. equities from neutral to bullish. Several breadth thrust indicators fired in recent days, and long-term breadth gauges have turned bullish. The four biggest risks are rising optimism, elections, earnings complacency, and a delayed stimulus.

Goods CPI inflation rises, while services inflation moderates. Small business optimism continues to improve, which bodes well for the economic recovery.

Goods CPI inflation rises, while services inflation moderates. Small business optimism continues to improve, which bodes well for the economic recovery.

The Fed has not provided specific guidance on long-term rates. Will likely wait for clarity on additional fiscal support before taking next policy steps. The market could test the Fed's resolve and push yields higher. The 10-year yield could hit 1.00% and the 30-year could touch 2.00%. Fed's TIPS share to keep rising.

Zweig Thrust Indicator, S45, and S48 give a buy signal. Big Mo Tape leans bullish, but does not show the normal thrust seen at start of new bull markets. Looking globally, the percent of global markets above their 200-day moving average also does not show the normal new bull market thrust.