Recent Publications

Builder Confidence Holds Steady

Commercial construction backlog hits a record. Empire state services activity strengthens. Weekly retail sales mostly up.

Builder Confidence Holds Steady

Commercial construction backlog hits a record. Empire state services activity strengthens. Weekly retail sales mostly up.

The U.S. Housing Market Has Not Peaked Yet

The recent easing in housing starts and home sales growth rates is not indicative of a reversal in their longer-term upward trends. Household formations and the tight labor market provide fundamental support to housing demand. Home prices remain well bid, but not in bubble territory.

Earnings Analysis: Four Positives, One Negative, and Two Lingering Concerns

Much of the profit margin gains are from tax cuts, but sales growth and buybacks have helped as well. EPS growth will slow in 2019. The magnitude will determine the impact on the market. Valuations leave little room for error.

Dividend-Related ETFs Heating Up

Lots of dividend-themed ETFs closed last week at new all-time highs. Industrials ETFs were standouts for the second week in a row. Emerging Markets and Precious Metals funds continued their recent slide. Significant inflows for Vanguard S&P Mid-Cap 400 ETF. Significant outflows for iShares PHLX Semiconductor ETF.

Empire State Manufacturing Moderates

The outlook for growth in the region also tempered.

Empire State Manufacturing Moderates

The outlook for growth in the region also tempered.

Propelled By Buybacks, NDR Demand Still Above Supply

$1 trillion in potential 2018 buy-backs is the main demand factor. NDR volume demand above supply. Tape leans bullish although extended.

Strong Economic Momentum Continues

Today's economic reports show strengthening y/y momentum in industrial production and retail sales, a pickup in inventory accumulation, as well as a rebound in consumer sentiment. Two of the three nowcasting models we follow are tracking 4.4% real output growth for Q3.

Strong Economic Momentum Continues

Today's economic reports show strengthening y/y momentum in industrial production and retail sales, a pickup in inventory accumulation, as well as a rebound in consumer sentiment. Two of the three nowcasting models we follow are tracking 4.4% real output growth for Q3.

Macro Confusion

Macro data has been very confusing. In some cases, one piece of data directly is in conflict with another. My guess is global trade uncertainty and polarization in the country may explain part of this.

Contrasting Yield Trends, Consistent Bearish Influences

Markets with low bond yields tend to be positively correlated with yields while high-yield markets tend to be inversely correlated with yields. Prospects for global downtrend would be supported by continuing rise in the relatively high yields of inversely-correlating emerging markets together with declines in the relatively low yields of developed markets. Watch for continuing EM currency weakness to influence EM yield uptrends, rising risk aversion to send U.S. yields lower, and global market correlations to strengthen on the downside.

Slightly Softer CPI Report

Beige Book: Tariffs creating capex uncertainty. Freight activity moderates. Jobless claims continue to trend lower. Consumer comfort rebounds.

Slightly Softer CPI Report

Beige Book: Tariffs creating capex uncertainty. Freight activity moderates. Jobless claims continue to trend lower. Consumer comfort rebounds.

Curve Inversion Impact on Sector Leadership

Yield curve inversion can be a useful tool for shifting sector allocation toward defensive and late-cycle sector leaders, but historically it hasn't signaled broader-market declines.

Six Different Perspectives on the Yield Curve

The yield curve continues to flatten. The rate of flattening has slowed, indicating a potential change in trend. No recession on the horizon.

If the World Sneezes, Will the U.S. Catch a Cold?

History suggests no, but given its diminishing share of global GDP, the U.S. may not be as immune as it used to be.

Communicating the Impact of Upcoming Sector Changes on Your ETFs

GICS will make dramatic changes to sector classifications on September 28th. Learn how each ETF fund family is implementing the change.

Producer Price Inflation Moderates

CFO business confidence eases slightly. Mortgage applications mixed.

Producer Price Inflation Moderates

CFO business confidence eases slightly. Mortgage applications mixed.

Two Part Series -- I Try to Prove Economic Activity Driven By Crowd Psychology

Animal spirits or crowd psychology drive many macro indicators from economic growth to the unemployment rate and housing starts. These surveys often lead by many months making them useful. Interestingly, the stock market itself is a measure of crowd psychology and is helpful in suggesting the economic outlook.

Blaming Buybacks

Buybacks are on pace to eclipse 2016's record. The blame placed on buybacks for crowding out capex and wage growth is likely misplaced. There's plenty of cash for all three. Ultra-low interest rates have encouraged a series of actions, including buybacks, that leaves companies more vulnerable during the next down cycle.

NFIB Small Business Optimism Continues to Soar

JOLTS show more job openings than unemployed. Manpower employment outlook strengthens. Wholesale inventories up.

NFIB Small Business Optimism Continues to Soar

JOLTS show more job openings than unemployed. Manpower employment outlook strengthens. Wholesale inventories up.

EM Debt - Contagion or Opportunity?

A sustained move above 325 bp may trigger another EM exposure reduction. Argentina and Turkey both have worse current account and external debt profiles compared with five years ago. An unexpected collapse in oil prices would darken the EM outlook.

Energy Shopping List: Shale Faltering... Offshore Rising?

Despite our recent oil downgrade (to neutral) we remain steadfast in our view that crude has entered as secular bull market. While we wait for the all-clear, we suggest clients make a "shopping list" of potential opportunities within the Energy Sector. Offshore drillers are risky but could offer the most upside of the entire energy sector.

The Haves and the Have Nots

Not a lot of funds breaking out to significant new highs last week. U.S. relative strength continues with Health Care/Industrials funds leading the charge last week. A number of Emerging and Developed countries closed the week at significant new lows on an absolute and relative basis. Recent weakness in commodity-related funds continued. Record weekly inflow to TLT.

Employment Trends Strengthen Further

But OECD U.S. CLI suggests softer economic growth ahead.

Employment Trends Strengthen Further

But OECD U.S. CLI suggests softer economic growth ahead.

America First or Are We In This Together?

Most global markets are in corrections. The U.S. evidence still leans bullish, but I do not believe the U.S. is an oasis. Some emerging markets, in US dollar terms, have collapsed.

Cementing Rate Hike Expectations

Steady jobs growth and accelerating wages in August. Expect the Fed to proceed with its march to achieving neutrality, which is likely four more rate hikes, including two this year.

Cementing Rate Hike Expectations

Steady jobs growth and accelerating wages in August. Expect the Fed to proceed with its march to achieving neutrality, which is likely four more rate hikes, including two this year.

A Rotting Foundation

Still marketweight, but global breadth deterioration is a warning. Watching Global Balanced Account Model, Rally Watch and Bear Watch. Downgrade currently more likely than upgrade.

Profit Perspectives

S&P 500 profits are around 50% of overall corporate profits. Overall profits are up 7.7% before tax but 16.1% after tax. I am watching wages and the ISM going forward.

ISM Non-Manufacturing Activity Strengthens

ADP private payroll gains moderate. Layoff trends still near multi-decade lows. Nonfarm productivity steady. Factory orders decline. Consumer comfort slips amid deepening political divide.

ISM Non-Manufacturing Activity Strengthens

ADP private payroll gains moderate. Layoff trends still near multi-decade lows. Nonfarm productivity steady. Factory orders decline. Consumer comfort slips amid deepening political divide.

Monthly Sector Update - September 2018

Leadership shifted more cyclical starting mid-August. Technology's breakout relative to Financials strengthens the case for overweighting Growth relative to Value.

China Indicator Review

China-related indicators have deteriorated on balance. Equity market momentum indicators remain bearish, while earnings data offer some silver linings. We remain marketweight MSCI China relative to the MSCI EM Index.

U.S. High Yield or European High Yield?

We don't see a compelling case for favoring European high yield over the U.S. Despite recent U.S. outperformance, European managers are likely to find their local market just as attractive as the U.S. after factoring in the hedging costs. But for those managers betting U.S. dollar strength will persist, the U.S. may make more sense.

Trade Deficit Widens Significantly

Light vehicle sales weakest in a year. State leading indexes suggest broad-based, but slower, growth ahead. NYC services activity grows faster. Weekly retail sales up. Mortgage applications little changed.

Trade Deficit Widens Significantly

Light vehicle sales weakest in a year. State leading indexes suggest broad-based, but slower, growth ahead. NYC services activity grows faster. Weekly retail sales up. Mortgage applications little changed.

Is the Worst Yet to Come?

The latest global PMIs indicate that global growth remains constructive, but that economic conditions are likely to get worse in the coming months. Led by Europe, developed markets continued to outpace emerging markets, many of which fell victim to recent market tensions.

August 2018 Sentiment/Valuation Update

Investor sentiment has been somewhat restrained. Valuations remain high based upon P/E's and Price/Sales. Broker's cash at record lows vs. margin debt, and cash is low in general.

Strong Model vs. Weak Seasonality

The U.S. Stock Market Model has been oscillating between bullish and neutral. The biggest autumn declines have occurred when the model has been bearish (-15%) on August 31, on average. The difference in median corrections has been small when the model has been bullish (-6%) versus neutral (-7%).

Weakness in Global Shipping Rates Keeps ETF Model from Recommending 100% Equities

ETF Model remains at 86% equities for second month in a row. Small-cap exposure increases slightly at the expense of dividend/value. International stock/bond exposure remains miniscule.

ISM Manufacturing Steams Ahead

Construction spending little changed.

ISM Manufacturing Steams Ahead

Construction spending little changed.

U.S. Dominated Fixed Income in August

CMBS and High Yield led the way. Worst excess return month for EM since January 2016.

Cycles Turn Down, But Watching the "Dot", And Why 20% Not Good Measure of Bulls and Bears

NDR cycle composite turning down. However, Big Mo Tape remains bullish. The 20% rule for bull and bear markets is questionable.

Consumer Sentiment Off in August

Regional activity mixed.

Consumer Sentiment Off in August

Regional activity mixed.

Skeptical Housing and Autos Update

Homebuilding and auto stocks have been on the defensive. Likewise, home sales and vehicle sales are well off their 2017 peaks. I remain skeptical based upon likely higher interest rates.

Personal Income, Spending, and Inflation Up

Jobless claims continue to trend lower. Consumer comfort off slightly.

Personal Income, Spending, and Inflation Up

Jobless claims continue to trend lower. Consumer comfort off slightly.

Dollar Down, Commodity Sectors Up

Commodity sectors have outperformed as the dollar has fallen since mid-August. Metals & Mining is an example of an industry that has a negative beta to the U.S. dollar, is still oversold, and could be expected to outperform if the dollar continues to weaken. Continued dollar weakness and further sector model improvement for Commodity sectors would likely cause us to lift our Materials underweight.

Answering Your Questions About the China/U.S. Trade War

We answer your questions on the recent developments in the China/U.S. trade war. It's likely that the battle will get longer and uglier, with negative consequences for both sides.

Are There Opportunities in EM Bonds?

EM bond spreads are the highest since 2016. Country correlations are relatively high. Asia may offer the best opportunities.

Q2 GDP Revised Up, Profits Strengthen

Pending home sales languish. Mortgage applications slip.

Q2 GDP Revised Up, Profits Strengthen

Pending home sales languish. Mortgage applications slip.

Choose Stocks with Greater Earnings Revisions

If earnings growth expectations come under pressure, companies with stronger earnings revisions should benefit. Select Companies with the Following Factor Exposures: Standardized Unexpected EPS, Asset Turnover, Free Cash Flow/Enterprise Value, Price Momentum, Earnings Revisions. Stocks Demonstrating These Characteristics Include: Booking Holdings, Target, Phillips 66, Valero, HCA Holdings, Boeing, Apple, Intel, Nvidia.

Is It Good News Sentiment Is Down From January?

Our Daily Sentiment Composite has been very restrained in optimism vs. January and June of 2018. However, general social mood remains very optimistic. And, Advisory Service Sentiment usually peaks before the market.

Consumer Confidence Soars

Consumer Confidence Soars

Existing home price growth eases slightly. Advance goods trade deficit widens. Regional activity strong. Weekly retail sales mixed.

What Does U.S. Strength Mean Going Forward?

Periods of strong U.S. outperformance have been followed by further gains in the S&P 500 up to one year later. However, brief bear markets have occurred in 30% of the cases. Monitor NDR models to decipher between normal corrections and bear markets. The NDR U.S. model is bullish.

The Impossible Dream

Producers turn to imports when domestic-based sources can't meet demand. Shale has been preventing the trade and current account deficits from deteriorating. Either we accept larger trade deficits or slower growth. In the short-run there are no easy solutions.

Should You Be Worried about a Short Squeeze in Treasurys?

There are lots of things to worry about in the Treasury market. A short squeeze isn't high on the list. We've seen heavy short positions for many weeks. Normalized for open interest, we're well off record levels.

Can a Prolonged Consolidation Have the Same Effect as a Bear?

Prior to Friday, SPY had gone 145 market days without making a new cycle high. Long bull market pauses like this are unusual, but not unprecedented. Tendency for bull market to distance itself from previous cyclical high after lengthy pauses.

CFNAI Shows Softer Growth in Q3

Texas manufacturing maintains strong momentum.

CFNAI Shows Softer Growth in Q3

Texas manufacturing maintains strong momentum.

Despite Some Warts, Tape Remains Mildly Bullish

Lots of new highs and new lows have been very negative historically, but most trend indicators lean bullish.

Oil & Energy - Where to Next?

In recent weeks, a soft physical market has bled into U.S. inventory data and flipped our Total Petroleum Model to a sell. Our core crude oil indicators are sending mixed signals. Despite recent weakness and our current neutral rating, we remain long-term bulls.

Durable Goods Orders Decline, Led by Aircraft

But core business orders advance, which is a positive sign for capex.

Durable Goods Orders Decline, Led by Aircraft

But core business orders advance, which is a positive sign for capex.

Watching Exports for Risks

Are the trade skirmishes hurting world trade? I look at exports to see.

Watching Gold Watch Report for the Verdict on Gold

Gold Watch report would confirm an improving outlook for gold. Watching trend, sentiment, U.S. dollar, and more. Equity bear would also support gold - neutral for now.

No, This Is Not the Longest Bull Market in History

Studies using 20% drops show the current rally is the longest in history, but the 20% rule is imperfect for studying market history. By NDR criteria, the current cyclical bull market is about average in terms of time and gains. More importantly, the U.S. Stock Market model has not signaled an end to the cyclical bull is imminent.

Markit U.S. Flash PMIs Show Slower Growth

New home sales decline again. FHFA house price gains moderate. Jobless claims near multi-decade low. Consumer comfort continues to trend up. K.C. Fed factory activity softens.

Markit U.S. Flash PMIs Show Slower Growth

New home sales decline again. FHFA house price gains moderate. Jobless claims near multi-decade low. Consumer comfort continues to trend up. K.C. Fed factory activity softens.

Is Consumer / Commodity Breaking Out?

Current sector recommendations and relative strength trends favor Consumer sectors over Commodity sectors, but we remain on watch for signs of a reversal. Two key indicators for Commodity sectors, the Real CRB Index and the gold/bond ratio, continue to trend down near term.

Summer Rally - Part 2

Further rally could be supported by demand from pension funds and safe haven buying. Stripped share has risen. Treasury bond put/call ratio has plummeted.

Is the Global Housing Market in Trouble?

Global house prices have recently taken a breather as some of the world's most overvalued markets, namely New Zealand, Canada, Australia, Sweden, and Norway, have seen price growth grind to a halt. Short- and intermediate-term risks suggest continued downside in prices. But the underlying drivers of long-term demand remain intact.

U.S. Dollar Strength Could Spell Trouble

Dollar strength is positive for consumer spending, but negative for export-oriented manufacturing. Coupled with tariffs, it could widen the trade deficit, contrary to President Trump's objective. Dollar strength could become bearish for the growth outlook later this year.

Existing Home Sales Slide Again

Mortgage apps trend reflects softer housing demand. Architecture billings decline. But state coincident indexes show near-steady growth. Freight activity strong. Weekly retail sales up.

Existing Home Sales Slide Again

Mortgage apps trend reflects softer housing demand. Architecture billings decline. But state coincident indexes show near-steady growth. Freight activity strong. Weekly retail sales up.

Favor U.K. Stocks With Lower Volatility

Replacing shareholder yield with lower 26-week semivariance as a favored factor in the U.K. Also, favoring companies with greater price momentum and cheaper free cash flow multiples. European stocks with favorable characteristics include: Luxottica Group, L'Oreal, Equinor, Repsol, Novartis, Novo Nordisk, Sky, Tesco, Easyjet, Ferguson, Halma.

Two Big Mistakes This Year

The number of S&P 500 shares outstanding has been falling in recent years. Corporate buying of stocks is at record levels. However, the potential supply of stocks is huge.

Lazy or Optimistic?

Investor's overweight allocation to equities likely reflects a lack of rebalancing instead of optimism. Regardless of their rationale, investors remain vulnerable to a major decline. The trillions sitting in bond funds could be the source of demand for the next phase of the equity secular bull market.

Summer Rally

The bond market has usually rallied in August, particularly in recent years. A lack of corporate supply likely supports bond market outperformance. We wouldn't be surprised if positive seasonality continues through Labor Day.

Mexico: Downgrading to Marketweight

We are cutting Mexican equities from overweight to marketweight relative to the EM benchmark with a one- to three-month view. Equity market technicals have deteriorated. A weaker currency outlook and global backdrop contribute to the incrementally bearish view.

Is it Time for Your Portfolio to Visit the Doctor?

Last week, the NDR sector team upgraded Health Care to overweight. Today we follow suit, adding the iShares U.S. Health Care Providers ETF (IHF) to our satellite portfolio.

Some Tape Negatives

A couple of tape measures of divergences are nagging me.

LEI Points to Continued Robust Expansion

But consumer sentiment declines.

LEI Points to Continued Robust Expansion

But consumer sentiment declines.

Some Good Macro News

I think it is late in the economic cycle, but a lot of indicators argue it is not over.

The Season for Carnage and Outflows

More indicator deterioration evident in a season when sharp five-declines are most common. Flow seasonality also warrants caution with current trend similar to last two bear markets - watching model and Bear Watch report. In regional allocation, adding to overweight U.S. exposure while cutting EM from marketweight to underweight and Japan from overweight to marketweight.

Housing Starts and Permits Show Weaker Trends

Philly Fed factory activity moderates. Jobless claims decline. Consumer economic expectations rise. But equipment finance industry confidence slides.

Housing Starts and Permits Show Weaker Trends

Philly Fed factory activity moderates. Jobless claims decline. Consumer economic expectations rise. But equipment finance industry confidence slides.

Digging Deeper into CMBS

We have liked CMBS for quite some time and remain overweight. We examine some of the differences between the Bloomberg Barclays CMBS and CMBS 2.0 indexes.

Downgrading Energy, Upgrading Health Care

Downgrading Energy and Real Estate to marketweight, Upgrading Health Care and Utilities to overweight. Defensive sector overweight (Health Care, Consumer Staples, Utilities) seen as tactical until mid-term elections.

How Does the Market Perform at the End of an Economic Cycle?

While equities usually continue to rise in the mature stage of a global economic cycle, they have tended to register a sharp decline around 13 months after the mid-point in a global economic expansion. In the more mature stage of the economic cycle, the U.S. has been the decisive outperformer.

Oil: Time to Downgrade

Three straight bearish inventory reports have flipped our Total Petroleum Model from a buy to a sell. In response to a softening physical market, weakening inventory reports, and continued US Dollar strength, we are downgrading our outlook on oil from bullish to neutral.

Strong Economic Momentum at Start of Q3

Economic reports today show increases in retail sales, industrial production, and nonfarm productivity. But declines in homebuilder confidence and mortgage demand raise a cautionary flag for the housing market.

Strong Economic Momentum at Start of Q3

Economic reports today show increases in retail sales, industrial production, and nonfarm productivity. But declines in homebuilder confidence and mortgage demand raise a cautionary flag for the housing market.

Short-Term Sentiment on Gold, Bonds, and Stocks

Gold, an inflation hedge, shows extreme pessimistic sentiment, and bonds, a deflation hedge, also show a fair amount of pessimism.

Contagion and Mid-Term Corrections

Corrections in the second half of mid-term years are as likely to have international catalysts as domestic ones. Our indicators suggest the market is vulnerable to an external shock. But any declines should be viewed in the context of a long-term uptrend.

NFIB Small Business Optimism Near Record High

Import prices steady. Weekly retail sales mixed.

NFIB Small Business Optimism Near Record High

Import prices steady. Weekly retail sales mixed.

CRE: Maintaining a Cautious Outlook

CRE returns have been remarkably steady. The Industrial sector (primarily warehouses) continued to lead the way. Rising costs and tight funding have contributed to weaker demand for new bank loans. We would be cautious about adding new properties to CRE portfolios at this time.

Talkin' Turkey

Turkey's bonds are cheap but not dirt cheap. A 10-year real yield of 4.7% is high for Turkey but not the highest globally. Spreads were wider during the GFC.

Some Not So Good Fundamentals

Easy money and fiscal stimulus are a sugar high, that can cause problems like inflation, debt service burdens, Italy, Turkey, etc. in the longer run.

MLP Strength and EAFE Weakness

Several MLP funds breaking out to the upside on an absolute and relative basis. EAFE and Emerging Markets funds continue to come under selling pressure. Relative performance consistent with recent ETF Model positioning.

EMEA: Downgrading South Africa & What to Watch in Turkey

We are downgrading South African equities to marketweight as Turkish contagion spreads. Sentiment on Turkey is at extremes, and markets are susceptible to policy catalysts. Watch for a turn in momentum indicators as a signal of trend shift.

Budget Deficit Widens Further

Real Estate Roundtable outlook deteriorates.

Budget Deficit Widens Further

Real Estate Roundtable outlook deteriorates.

Davis' Law and the NYSE A/D Line

Market action leans bullish with new highs on the daily NYSE A/D Line.

CPI Inflation Accelerates

This report will keep the Fed on its current policy normalization path.

CPI Inflation Accelerates

This report will keep the Fed on its current policy normalization path.

1968 vs. 2018 -- Divided Country, Sentiment, Fed Policy, Households Heavily Invested in Stocks

I compare 2018 to 1968. There is both good and bad news---it preceded a bear market, but the country survived.

A Warning From RO/RO - Risk-Off Rising

Weak breadth, narrow leadership, and mega-cap dependence not conducive to sustainable bull market. Consistent with other signs of a cooling phase, Risk-On/Risk-Off Ratio has declined since May peak. Chances of bear market and equity downgrade will increase if 200-Day RO/RO Diffusion Index follows 50-day index in reaching bearish levels.

Is Japan the Ultimate Litmus Test of the Reflation Trade?

The BoJ won't start normalizing policy before 2021. If cyclical forces matter, then inflation should start to show up in Japan. It will be difficult for JGB yields to mount a sustained rise.

Monthly Sector Update - August 2018

Sector and sub-industry breadth, as well as our sector model still lean defensive. We may upgrade Health Care to overweight and downgrade Real Estate to marketweight, in line with our model.

Producer Price Inflation Eases Slightly

Tariffs impact wholesale inventories. Consumer comfort rebounds. Jobless claims decline. Freight activity strengthens.

Producer Price Inflation Eases Slightly

Tariffs impact wholesale inventories. Consumer comfort rebounds. Jobless claims decline. Freight activity strengthens.

Are We One Step Closer to Global Recession?

Our Global Recession Watch Report recorded its first recessionary signal, giving us further confirmation that the global economic cycle is maturing. Our global economic indicators support our current marketweight position in global equities.

OECD U.S. CLI Points to Slightly Softer Growth Ahead

Housing affordability continues to slide. Mortgage applications decline.

OECD U.S. CLI Points to Slightly Softer Growth Ahead

Housing affordability continues to slide. Mortgage applications decline.

July 2018 Sentiment/Valuation Update

Stocks are high on a valuation basis and household cash on the sidelines is low relative to stocks or margin debt.

Who Is Saving More?

Although the saving rate was revised up, it is business, property, and other asset owners who are saving more. Wage earners are not. These trends contribute to rising income inequality, which could contribute to slower spending and output growth.

Small Business Optimism Soars

JOLTS continues to show tight labor markets. Used vehicle values rise further. Weekly retail sales softer than expected.

Small Business Optimism Soars

JOLTS continues to show tight labor markets. Used vehicle values rise further. Weekly retail sales softer than expected.

Oil: Three Things for Bulls to Worry About

A weakening physical market, deteriorating inventory model readings, and a strong US Dollar are concerns for oil bulls. For now, the weight of the evid ence leans bullish, but we will monitor these, and other, risks.

Reviewing European Earnings Trends

UK and European realized earnings have been relatively strong on a trailing basis. The most recent quarterly earnings data has been relatively disappointing. Expectations appear high relative to recent trends and the macroeconomic outlook.

Defensive Leadership: Typical Seasonality or Bear Warning?

Leadership has shifted from aggressive to defensive since mid-June. The shift has not been enough to impact our models. Our intermediate-term U.S. equity outlook remains positive. Much more is needed to turn from Growth to Value, but we are getting closer to returning to large over small.

Credit Conditions Improve Supporting High Yield Overweight

Led by the consumer component, the NDR CCI rose for the second straight month. Until credit conditions deteriorate, we will likely remain overweight high yield.

Are ETFs Making the Sector/Industry Call More Important?

Sector/Industry ETFs are becoming a larger slice of the ETF pie. Decomposition study shows the growing influence of sector/industry to a stock's return.

Employment Trends Strengthen

This suggests strong payrolls growth in the coming months.

Employment Trends Strengthen

This suggests strong payrolls growth in the coming months.

Trend from 56% to 73% Bullish

Abstract: Trend evidence still leans bullish, but with lots of divergences.

Steady Jobs Growth Keeps Fed on Track

The July Employment Report did not change the outlook for monetary policy. The Fed will continue to gradually raise rates, with the next installment coming at the September meeting. ISM services activity cools. Light vehicle sales decline. But state leading indexes still show solid growth. Trade deficit widens.

Steady Jobs Growth Keeps Fed on Track

The July Employment Report did not change the outlook for monetary policy. The Fed will continue to gradually raise rates, with the next installment coming at the September meeting. ISM services activity cools. Light vehicle sales decline. But state leading indexes still show solid growth. Trade deficit widens.

Triggers for Next Allocation Change - Likely a Cut to Underweight

For overweight equity allocation -- bullish messages from Global Balanced Model and Rally Watch report. For underweight allocation - bearish messages from model and Bear Watch report. Given global breadth weakness, earnings and economic momentum, relative performance and similarities to last two bear markets, downgrade more likely.

Apple Has $1 Trillion Reasons to Be Concerned

Stocks that have been the first to cross round numbers have underperformed up to a year later.

Recession in 2021 or Earlier?

I make a case for recession hitting the U.S. before 2021. Nevertheless, the weight of the evidence is still mildly bullish for economic growth currently.

Reviewing Emerging Markets Earnings Trends

After a period of strength in 2017, EM earnings trends have weakened. Early indications of 2Q18 earnings are positive, but it is still early in the season. Directional trends in expectations have been decelerating even as relative levels remain high.

Financial Leverage Concerns for Sectors

We do not see increases in net debt / equity the past two years as particularly worrisome. Sectors that have increased leverage the most the past two years are Consumer Staples, Technology, Industrials and Health Care. From a longer-term perspective, Health Care and Consumer Discretionary rising leverage trends are worth watching.

Layoff Trends Hover Near Multi-Decade Lows

Factory orders rise. NYC services activity surges. Consumer comfort pulls back.

Layoff Trends Hover Near Multi-Decade Lows

Factory orders rise. NYC services activity surges. Consumer comfort pulls back.

Revisiting the Credit Barbell - Is it Time to Get Back into BB Bonds?

We continue to recommend high yield over investment grade. We lack the technical evidence for switching back to BBs.

The World Isn't Falling Apart, But Trade War Clouds Outlook

The latest global PMI data remains strong, but is giving us further evidence that global growth may have peaked. The escalating trade war has led to weakening export orders among the world's largest economies.

ISM Manufacturing Takes A Step Back, But Level Still High

ADP private payrolls jump. Online help-wanted ads rebound. Construction spending falls. Mortgage applications slip.

ISM Manufacturing Takes A Step Back, But Level Still High

ADP private payrolls jump. Online help-wanted ads rebound. Construction spending falls. Mortgage applications slip.

Featured Charts From NDR Conference

I go over some charts I presented at the NDR Conference using five favorite Tape, Sentiment, Valuation, Macro, and Fed Policy Charts.

Are Dividend Stocks Washed Out?

On a tactical basis, mean reversion potential, interest rates, and mid-term seasonality are positives for dividend stocks. On a secular basis, dividend stocks are not oversold enough to offset interest rate risks, the equity secular bull, and valuations. Focus on dividend stocks with quality balance sheets and low valuations.

Personal Income and Spending Rise

Consumer confidence still soaring. Employment costs trend up. Regional factory activity mixed. Existing home prices continue to rise. Weekly retail sales edge up. Texas services activity eases slightly.

Personal Income and Spending Rise

Consumer confidence still soaring. Employment costs trend up. Regional factory activity mixed. Existing home prices continue to rise. Weekly retail sales edge up. Texas services activity eases slightly.

Is Corporate Debt about to Implode?

Fears over rising corporate leverage are largely overblown. During the next recession, some companies will fall off the wagon.

ETF Model Responds to Improvement in Global Breadth

14% shift from bonds to stocks brings equity allocation to 86%. U.S. large-cap and dividend/value funds see the largest increases in exposure. Junk and Emerging Markets bond funds were the only fixed income segments to see an increase in exposure.

Pending Home Sales Rebound, But Momentum Weak

Texas manufacturing moderates slightly. Electroindustry business confidence sinks.

Pending Home Sales Rebound, But Momentum Weak

Texas manufacturing moderates slightly. Electroindustry business confidence sinks.

How Does Trend Fit Into Big Picture?

Trend evidence leans bullish, but other evidence is in conflict leaving me with a neutral hedge fund trading strategy.