Public Publication Content

Recent Publications

Regional factory activity moderates
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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.

Ned Davis Research | Economics | U.S. Daily Economic Perspectives | Daily
ETF Model stock allocation rises on breadth improvement
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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.

Ned Davis Research | ETF Selection | Model Update | Monthly
Breadth thrusts versus optimistic sentiment
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Breadth thrusts this year are still in effect. Under breadth thrust buys, momentum usually trumps sentiment. Thus, we adjust DAVIS265 for breadth thrusts.

Ned Davis Research | Ned's Insights | Institutional Hotline | 3X Weekly
Death-Cross watch for 5G Network Infrastructure
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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.

Ned Davis Research | Thematic | Trend Chart | Weekly
Rise in COVID temporarily slows economy
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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.

Ned Davis Research | Ned's Insights | Institutional Hotline | 3X Weekly
Consumer spending growth slows as income falls
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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.

Ned Davis Research | Economics | U.S. Daily Perspectives NL | Daily
Consumer spending growth slows as income falls
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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.

Ned Davis Research | Economics | U.S. Daily Economic Perspectives | Daily
How Tesla will impact S&P 500 Consumer Discretionary sector
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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.

Ned Davis Research | Equities | U.S. Sector & Industry Focus | Weekly
Trade Initiation: Emerging over Developed Markets
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We initiate a trade to overweight Emerging relative to Developed Markets on a bullish trend with improving breadth and relative PE expansion.

Ned Davis Research | Thematic | Investment | N/A
Select stocks with greater earnings revisions
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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.

Ned Davis Research | Stock Selection | U.S. Portfolio Strategy | Monthly
While vaccine cured divergences problem, it led to excessive optimism
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S574A rises to excessive optimism. Individual investors join the party. Update on foreign investors over the last year - record buying.

Ned Davis Research | Ned's Insights | Institutional Hotline | 3X Weekly
G7 and BRIC outlook: The storm before the calm
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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.

Ned Davis Research | Economics | Global Focus | Weekly
Consumer confidence declines on weaker expectations
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Consumer confidence declines, raising the risk the recovery is slowing. But house prices continue to accelerate. Richmond Fed regional activity loses some momentum.

Ned Davis Research | Economics | U.S. Daily Perspectives NL | Daily
Consumer confidence declines on weaker expectations
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Consumer confidence declines, raising the risk the recovery is slowing. But house prices continue to accelerate. Richmond Fed regional activity loses some momentum.

Ned Davis Research | Economics | U.S. Daily Economic Perspectives | Daily
Moderate inflation pressures in 2021
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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.

Ned Davis Research | Economics | U.S. Focus | Monthly
Sneak peak at 2021 cycle composite
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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.

Ned Davis Research | Equities | U.S. Focus | Weekly
European equities: can Value outperform?
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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.

Ned Davis Research | Equities | Global Focus | Weekly
European equities: can Value outperform?
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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.

Ned Davis Research | Equities | Europe Focus | Monthly
Muni shift
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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.

Ned Davis Research | Fixed Income | Focus | Bi-Weekly
Markit Flash U.S. PMIs surge
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Markit PMIs show private business activity strengthening. CFNAI confirms continued growth in early Q4. Equipment finance industry confidence up.

Ned Davis Research | Economics | U.S. Daily Economic Perspectives | Daily
Markit Flash U.S. PMIs surge
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Markit PMIs show private business activity strengthening. CFNAI confirms continued growth in early Q4. Equipment finance industry confidence up.

Ned Davis Research | Economics | U.S. Daily Perspectives NL | Daily
Vaccine nearly 90% effective in killing divergences
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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.

Ned Davis Research | Ned's Insights | Institutional Hotline | 3X Weekly
Bitcoin nearing USD & EUR all-time highs
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Increasing adoption as an alternative currency has pushed Bitcoin near its all-time highs vs USD and EUR.

Ned Davis Research | Thematic | Trend Chart | Weekly
Is the vaccine a game changer?
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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.

Ned Davis Research | Ned's Insights | Institutional Hotline | 3X Weekly
More broadening, more equity exposure
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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.

Ned Davis Research | Equities | Global Focus | Weekly
Leading indicators up, but cautionary signs abound
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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.

Ned Davis Research | Economics | U.S. Daily Economic Perspectives | Daily
Leading indicators up, but cautionary signs abound
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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.

Ned Davis Research | Economics | U.S. Daily Perspectives NL | Daily
Near-term cautious on Banks
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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.

Ned Davis Research | Equities | U.S. Sector & Industry Focus | Weekly
Positive surprises waning, reason to worry?
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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.

Ned Davis Research | Economics | Global Focus | Weekly
New liquidity indicator shows fading support
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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.

Ned Davis Research | Fixed Income | Focus | Bi-Weekly
Better 2021 outlook with a Biden stimulus
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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.

Ned Davis Research | Economics | U.S. Focus | Monthly
Housing starts increase
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Housing starts up, led by single-family. Architecture billings still shrinking, but outlook improves.

Ned Davis Research | Economics | U.S. Daily Economic Perspectives | Daily
Housing starts increase
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Housing starts up, led by single-family. Architecture billings still shrinking, but outlook improves.

Ned Davis Research | Economics | U.S. Daily Perspectives NL | Daily
Trade Initiation: Small-caps over large-caps
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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.

Ned Davis Research | Thematic | Investment | N/A
Updating factor recommendations as market environment improves
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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.

Ned Davis Research | Stock Selection | Europe Portfolio Strategy | Monthly
Excessive optimism from short-term to cyclical
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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.

Ned Davis Research | Ned's Insights | Institutional Hotline | 3X Weekly
Big potential for small-caps
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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.

Ned Davis Research | Equities | U.S. Focus | Weekly
Retail sales moderate, but y/y momentum solid
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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.

Ned Davis Research | Economics | U.S. Daily Perspectives NL | Daily
Retail sales moderate, but y/y momentum solid
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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.

Ned Davis Research | Economics | U.S. Daily Economic Perspectives | Daily
European, global and ex-ante views of 60/40
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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.

Ned Davis Research | Fixed Income | Focus | Bi-Weekly
Vaccine induced unwind?
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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.

Ned Davis Research | ETF Selection | ETFs on the Move | Weekly
Empire State manufacturing moderates
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Slower factory activity growth in the region, but positive outlook for the near-term.

Ned Davis Research | Economics | U.S. Daily Economic Perspectives | Daily
Empire State manufacturing moderates
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Slower factory activity growth in the region, but positive outlook for the near-term.

Ned Davis Research | Economics | U.S. Daily Perspectives NL | Daily
Intermediate-term overbought, but trend still leans bullish
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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.

Ned Davis Research | Ned's Insights | Institutional Hotline | 3X Weekly
Modest producer price inflation
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Subdued PPI inflation amid large output and labor market slack. Consumer sentiment slides as COVID health crisis worsens. Budget deficit continues to swell.

Ned Davis Research | Economics | U.S. Daily Economic Perspectives | Daily
Modest producer price inflation
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Subdued PPI inflation amid large output and labor market slack. Consumer sentiment slides as COVID health crisis worsens. Budget deficit continues to swell.

Ned Davis Research | Economics | U.S. Daily Perspectives NL | Daily
EM Debt rallying too
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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.

Ned Davis Research | ETF Selection | Highlights | Weekly
Gold outperforming bonds favors commodity related themes
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Continued outperformance of gold over bonds will build conviction for commodity and emerging market themes over consumer-related themes in 2021.

Ned Davis Research | Thematic | Trend Chart | Weekly
Fab Five Monetary and election update
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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.

Ned Davis Research | Ned's Insights | Institutional Hotline | 3X Weekly
Not giving up on gold
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Maintaining bullish gold position. Watching trend, sentiment, interest rates, dollar and secular developments. Gold Watch aggregate describes bullish indicator evidence.

Ned Davis Research | Equities | Global Focus | Weekly
Factor investing's worst nightmare
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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.

Ned Davis Research | Equities | U.S. Focus | Weekly
The demographic implications of the pandemic
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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.

Ned Davis Research | Economics | Global Focus | Weekly
Neutralizing our Growth overweight / Value underweight
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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.

Ned Davis Research | Equities | U.S. Sector & Industry Focus | Weekly
Consumer price inflation weak
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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.

Ned Davis Research | Economics | U.S. Daily Economic Perspectives | Daily
Consumer price inflation weak
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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.

Ned Davis Research | Economics | U.S. Daily Perspectives NL | Daily
Adding alts to the stock/bond mix
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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.

Ned Davis Research | Fixed Income | Focus | Bi-Weekly
Broken trend or opportunity to get in?
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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.

Ned Davis Research | Thematic | On the Radar | Weekly
Fab Five sentiment update - just neutral
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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.

Ned Davis Research | Ned's Insights | Institutional Hotline | 3X Weekly
Small business optimism steady
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Cautious small biz optimism amid election and pandemic uncertainty. Job openings still far below pre-recession level.

Ned Davis Research | Economics | U.S. Daily Economic Perspectives | Daily
Small business optimism steady
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Cautious small biz optimism amid election and pandemic uncertainty. Job openings still far below pre-recession level.

Ned Davis Research | Economics | U.S. Daily Perspectives NL | Daily
European Equities - What just happened?
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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.

Ned Davis Research | Equities | Global Focus | Weekly
Upgrading High Yield and EM
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Upgrading HY and EM to overweight from marketweight. Downgrading Treasurys to underweight. Reduced uncertainty, vaccine progress, and better technicals support move.

Ned Davis Research | Fixed Income | Focus | Bi-Weekly
Employment trends continue to improve
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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.

Ned Davis Research | Economics | U.S. Daily Perspectives NL | Daily
Employment trends continue to improve
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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.

Ned Davis Research | Economics | U.S. Daily Economic Perspectives | Daily
Dividends investing during COVID
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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.

Ned Davis Research | Equities | U.S. Focus | Weekly
Fab Five Composite and tape update
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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.

Ned Davis Research | Ned's Insights | Institutional Hotline | 3X Weekly
Labor market recovery continues
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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.

Ned Davis Research | Economics | U.S. Daily Economic Perspectives | Daily
Labor market recovery continues
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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.

Ned Davis Research | Economics | U.S. Daily Perspectives NL | Daily
Healthcare providers can prosper without a blue wave
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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.

Ned Davis Research | Thematic | Trend Chart | Weekly
Hedging macro risks of inflation/deflation
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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.

Ned Davis Research | Ned's Insights | Institutional Hotline | 3X Weekly
Where the U.S. economy stands in Q3 2020
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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.

Ned Davis Research | Economics | U.S. Economics Cycle Snapshot | Quarterly
Fed to consider changes in bond buying
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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.

Ned Davis Research | Fixed Income | Focus | Bi-Weekly
Watching the breadth
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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.

Ned Davis Research | Equities | Global Focus | Weekly
Global economy shrugs off COVID
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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.

Ned Davis Research | Economics | Global Focus | Weekly
A cyclical surge in productivity
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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.

Ned Davis Research | Economics | U.S. Daily Economic Perspectives | Daily
A cyclical surge in productivity
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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.

Ned Davis Research | Economics | U.S. Daily Perspectives NL | Daily
Monthly sector update - November 2020
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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.

Ned Davis Research | Equities | U.S. Sector & Industry Focus | Weekly
ISM services activity moderates slightly
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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.

Ned Davis Research | Economics | U.S. Daily Economic Perspectives | Daily
ISM services activity moderates slightly
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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.

Ned Davis Research | Economics | U.S. Daily Perspectives NL | Daily
Investors positioned for a Blue Wave in October
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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.

Ned Davis Research | Thematic | On the Radar | Weekly
Election messages for markets (so far)
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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.

Ned Davis Research | Equities | U.S. Focus | Weekly
October sentiment/valuation update
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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.

Ned Davis Research | Ned's Insights | Institutional Hotline | 3X Weekly
Grading Trump on Trumponomics
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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.

Ned Davis Research | Economics | U.S. Focus | Monthly
Factory orders increase
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Factory orders continue to improve, in tandem with broad manufacturing activity. NYC services activity strengthens.

Ned Davis Research | Economics | U.S. Daily Economic Perspectives | Daily
Factory orders increase
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Factory orders continue to improve, in tandem with broad manufacturing activity. NYC services activity strengthens.

Ned Davis Research | Economics | U.S. Daily Perspectives NL | Daily
Credit Approaching Critical Juncture
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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.

Ned Davis Research | Fixed Income | Focus | Bi-Weekly
ISM manufacturing charges on
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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.

Ned Davis Research | Economics | U.S. Daily Economic Perspectives | Daily
ISM manufacturing charges on
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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.

Ned Davis Research | Economics | U.S. Daily Perspectives NL | Daily
Can a steeper yield curve support commodity prices?
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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.

Ned Davis Research | Energy | Focus | Monthly
ETF Model reduces equity allocation again
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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.

Ned Davis Research | ETF Selection | Model Update | Monthly
Small/large, post-election, and COVID-19 trend
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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.

Ned Davis Research | Ned's Insights | Institutional Hotline | 3X Weekly
Personal income and spending stronger than expected
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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.

Ned Davis Research | Economics | U.S. Daily Economic Perspectives | Daily
Personal income and spending stronger than expected
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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.

Ned Davis Research | Economics | U.S. Daily Perspectives NL | Daily
Know when to hold EM
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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.

Ned Davis Research | ETF Selection | Highlights | Weekly
Large shifts in PCE - Q3 2020 vs. Q3 2019
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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.

Ned Davis Research | Thematic | Trend Chart | Weekly
Macro update - the good, the bad, and the ugly
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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.

Ned Davis Research | Ned's Insights | Institutional Hotline | 3X Weekly
Continuing dollar downtrend, emerging currency comeback
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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.

Ned Davis Research | Equities | Global Focus | Weekly
Real GDP rebounds sharply post lockdown
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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.

Ned Davis Research | Economics | U.S. Daily Perspectives NL | Daily
Real GDP rebounds sharply post lockdown
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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.

Ned Davis Research | Economics | U.S. Daily Economic Perspectives | Daily
Is the eurozone on the brink of a double-dip recession?
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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.

Ned Davis Research | Economics | Global Focus | Weekly
Bond proxy update
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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.

Ned Davis Research | Equities | U.S. Sector & Industry Focus | Weekly
Measuring European financial conditions
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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.

Ned Davis Research | Fixed Income | Focus | Bi-Weekly
If you can't beat EM, join EM
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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.

Ned Davis Research | Thematic | On the Radar | Weekly
Advance goods trade deficit narrows
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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.

Ned Davis Research | Economics | U.S. Daily Perspectives NL | Daily
Advance goods trade deficit narrows
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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.

Ned Davis Research | Economics | U.S. Daily Economic Perspectives | Daily
Pick stocks with strong price momentum
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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

Ned Davis Research | Stock Selection | U.S. Portfolio Strategy | Monthly
Economic optimism and foreign buying
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Bloomberg Consumer Comfort has record surge. Michigan Consumer Expectations also has a big jump. Near record buying of U.S. stocks by global investors.

Ned Davis Research | Ned's Insights | Institutional Hotline | 3X Weekly
Revisiting the COVID trade
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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.

Ned Davis Research | Equities | U.S. Focus | Weekly
Durable goods orders surprise on the upside
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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.

Ned Davis Research | Economics | U.S. Daily Perspectives NL | Daily
Durable goods orders surprise on the upside
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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.

Ned Davis Research | Economics | U.S. Daily Economic Perspectives | Daily
Looking for new hedges? Try this tool
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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.

Ned Davis Research | Fixed Income | Focus | Bi-Weekly
New home sales slip, but upward trend intact
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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.

Ned Davis Research | Economics | U.S. Daily Economic Perspectives | Daily
New home sales slip, but upward trend intact
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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.

Ned Davis Research | Economics | U.S. Daily Perspectives NL | Daily
Elite Eight update
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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.

Ned Davis Research | Ned's Insights | Institutional Hotline | 3X Weekly
Theme Initiation: Cloud Infrastructure
|

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.

Ned Davis Research | Thematic | Investment | N/A
Flash PMIs jump to new highs
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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.

Ned Davis Research | Economics | U.S. Daily Perspectives NL | Daily
Flash PMIs jump to new highs
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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.

Ned Davis Research | Economics | U.S. Daily Economic Perspectives | Daily
Biotech also hoping for cure
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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.

Ned Davis Research | Thematic | Trend Chart | Weekly
Let's talk politics
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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.

Ned Davis Research | Ned's Insights | Institutional Hotline | 3X Weekly
Commodity recovery continues... Financials to follow?
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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.

Ned Davis Research | Equities | Global Focus | Weekly
China's risks and rewards
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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.

Ned Davis Research | Economics | Global Focus | Weekly
Can the Homebuilding rally continue?
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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.

Ned Davis Research | Equities | U.S. Sector & Industry Focus | Weekly
Existing home sales soar
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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.

Ned Davis Research | Economics | U.S. Daily Economic Perspectives | Daily
Existing home sales soar
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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.

Ned Davis Research | Economics | U.S. Daily Perspectives NL | Daily
Credit risk vs. interest rate risk
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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.

Ned Davis Research | Fixed Income | Focus | Bi-Weekly
Architecture billings contract at a slower pace
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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.

Ned Davis Research | Economics | U.S. Daily Economic Perspectives | Daily
Architecture billings contract at a slower pace
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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.

Ned Davis Research | Economics | U.S. Daily Perspectives NL | Daily
Price momentum outperforming other factors
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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.

Ned Davis Research | Stock Selection | Europe Portfolio Strategy | Monthly
Stop the world - I want to get off
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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.

Ned Davis Research | Ned's Insights | Institutional Hotline | 3X Weekly
Would a capital gains tax hike pressure stocks?
|

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.

Ned Davis Research | Equities | U.S. Focus | Weekly
Housing starts and permits on an upward trajectory
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Housing starts and permits rise, led by single-family. CEO confidence surges at the end of Q3.

Ned Davis Research | Economics | U.S. Daily Economic Perspectives | Daily
Housing starts and permits on an upward trajectory
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Housing starts and permits rise, led by single-family. CEO confidence surges at the end of Q3.

Ned Davis Research | Economics | U.S. Daily Perspectives NL | Daily
Will business bankruptcies stall the recovery?
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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.

Ned Davis Research | Economics | U.S. Focus | Monthly
Bond sentiment: complacent or pessimistic?
|

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.

Ned Davis Research | Fixed Income | Focus | Bi-Weekly
Builder confidence hits a new record high
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Record high builder confidence bodes well for housing starts in the near-term. But capex sentiment weakens.

Ned Davis Research | Economics | U.S. Daily Economic Perspectives | Daily
Builder confidence hits a new record high
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Record high builder confidence bodes well for housing starts in the near-term. But capex sentiment weakens.

Ned Davis Research | Economics | U.S. Daily Perspectives NL | Daily
Stock and economic trends to be aware of
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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.

Ned Davis Research | Ned's Insights | Institutional Hotline | 3X Weekly
Retail sales propel the recovery
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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.

Ned Davis Research | Economics | U.S. Daily Economic Perspectives | Daily
Retail sales propel the recovery
|

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.

Ned Davis Research | Economics | U.S. Daily Perspectives NL | Daily
NextEra Energy - still a utility
|

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.

Ned Davis Research | Thematic | Trend Chart | Weekly
Do we need more stimulus?
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We will have a booming Q3 in growth. Deficits and money supply are through the roof. Yet, K-shaped recovery is probable.

Ned Davis Research | Ned's Insights | Institutional Hotline | 3X Weekly
Now overweight for a year-end rally
|

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.

Ned Davis Research | Equities | Global Focus | Weekly
Global housing boom - Will it last?
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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.

Ned Davis Research | Economics | Global Focus | Weekly
Sector earnings and valuation risks
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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.

Ned Davis Research | Equities | U.S. Sector & Industry Focus | Weekly
Transportation breakout
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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.

Ned Davis Research | ETF Selection | Highlights | Weekly
Initial jobless claims stubbornly high
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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.

Ned Davis Research | Economics | U.S. Daily Economic Perspectives | Daily
Initial jobless claims stubbornly high
|

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.

Ned Davis Research | Economics | U.S. Daily Perspectives NL | Daily
Expanded municipal coverage
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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.

Ned Davis Research | Fixed Income | Focus | Bi-Weekly
Transportation on our radar
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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.

Ned Davis Research | Thematic | On the Radar | Weekly
Producer price inflation up modestly
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Producer prices rise more than expected in September. But annual inflation remains subdued. Lack of pipeline inflation pressures.

Ned Davis Research | Economics | U.S. Daily Economic Perspectives | Daily
Producer price inflation up modestly
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Producer prices rise more than expected in September. But annual inflation remains subdued. Lack of pipeline inflation pressures.

Ned Davis Research | Economics | U.S. Daily Perspectives NL | Daily
Commitment of traders on stocks and bonds
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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.

Ned Davis Research | Ned's Insights | Institutional Hotline | 3X Weekly
Breadth thrusts suggest bull to continue into 2021
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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.

Ned Davis Research | Equities | U.S. Focus | Weekly
CPI inflation remains modest
|

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

Ned Davis Research | Economics | U.S. Daily Perspectives NL | Daily
CPI inflation remains modest
|

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

Ned Davis Research | Economics | U.S. Daily Economic Perspectives | Daily
How much curve steepening will the Fed allow?
|

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.

Ned Davis Research | Fixed Income | Focus | Bi-Weekly
Breadth thrusts, but lack of confirmation
|

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.

Ned Davis Research | Ned's Insights | Institutional Hotline | 3X Weekly

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