Public Publication Content

Recent Publications

Dollar or gold? Go with gold

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Rising U.S. dollar and gold have broken from inverse correlation. With gold trend stronger and more sustainable, inverse correlation likely to reassert with dollar weakness. While negative real rates support gold, narrowing differentials negative for dollar.

Ned Davis Research | Equities | Global Focus | Weekly

Private sector activity slows

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Markit U.S. flash PMIs drop, largely due to coronavirus impact on demand. Existing home sales slip, but y/y momentum still strong. Commercial real estate market conditions improve.

Ned Davis Research | Economics | U.S. Daily Economic Perspectives | Daily

Private sector activity slows

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Markit U.S. flash PMIs drop, largely due to coronavirus impact on demand. Existing home sales slip, but y/y momentum still strong. Commercial real estate market conditions improve.

Ned Davis Research | Economics | U.S. Daily Perspectives NL | Daily

Industry themes for 2020

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Discretionary home-related is our favorite near-term theme. Medicare for All fears are creating buying opportunities in health care services. We remain optimistic on the next video game cycle.

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

Employment situation contradictions

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Employment growth slows, but still strong. Employment Trends Index hits new yearly high. But downside jolt on job openings. And real weekly earnings are flat from a year ago.

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

QQQ is looking a lot like it did in late 1999

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QQQ is up 65% since Christmas Eve 2018, drawing comparisons to the Tech Bubble. Our pattern matching tool agrees, returning October 1998 - December 1999 as the closest volatility-adjusted match. However, broad market breadth is much healthier now than in late 1999.

Ned Davis Research | ETF Selection | Highlights | Weekly

Is FANMAG in a bubble?

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Technical, sentiment, and (to a lesser extent) fundamental data do not support the bubble case for FANMAG/large-cap Growth. The macro backdrop of a long expansion and excess stimulus is ideal for bubble conditions. The absence of a bubble does not prevent a cyclical pullback or the emergence of a bubble in the future.

Ned Davis Research | Equities | U.S. Focus | Weekly

LEI rebounds strongly

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Leading indicators suggest some economic growth improvement in 2H 2020. Philly Fed manufacturing soars. No visible negative impact from coronavirus or slower global growth. Layoffs remain low. Consumer economic expectations pick up.

Ned Davis Research | Economics | U.S. Daily Economic Perspectives | Daily

LEI rebounds strongly

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Leading indicators suggest some economic growth improvement in 2H 2020. Philly Fed manufacturing soars. No visible negative impact from coronavirus or slower global growth. Layoffs remain low. Consumer economic expectations pick up.

Ned Davis Research | Economics | U.S. Daily Perspectives NL | Daily

Wall of money moves into bonds

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Every major sector has been buying bonds this year. Flows into bond mutual funds and ETFs have totaled a record $104 billion so far in 2020. Foreign investors and banks continue to buy bonds.

Ned Davis Research | Fixed Income | Focus | Bi-Weekly

Housing market strengthens

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Strong trend and momentum in housing starts and permits bode well for the housing market outlook. PPI inflation rises on stronger trade margins. But level still subdued, keeping the Fed on hold. Architecture billings suggest a pickup in nonresidential construction spending in 2H 2020.

Ned Davis Research | Economics | U.S. Daily Economic Perspectives | Daily

Housing market strengthens

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Strong trend and momentum in housing starts and permits bode well for the housing market outlook. PPI inflation rises on stronger trade margins. But level still subdued, keeping the Fed on hold. Architecture billings suggest a pickup in nonresidential construction spending in 2H 2020.

Ned Davis Research | Economics | U.S. Daily Perspectives NL | Daily

DAVIS265 question

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DAVIS265 fell sharply from 83% to 44% bulls recently. The reasons can be seen on the daily DAVIS265 series charts. My guess is that the coronavirus really caused a lot of caution.

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

Pick stocks with higher free cash flow yields

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Favor stocks with stronger price momentum, lower semivariance, greater shareholder yield, and higher free cash flow yield. Favored Stocks Include: Roche, L'Oreal, Novo Nordisk, Kering, Safran, British American Tobacco, Relx, Associated British Foods, WPP, Next.

Ned Davis Research | Stock Selection | Europe Portfolio Strategy | Monthly

Builder confidence holds high

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HMI still near highest since mid-1999. Bodes well for housing starts in the near-term. Empire manufacturing strengthens. ATA truck tonnage remains subdued.

Ned Davis Research | Economics | U.S. Daily Economic Perspectives | Daily

Builder confidence holds high

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HMI still near highest since mid-1999. Bodes well for housing starts in the near-term. Empire manufacturing strengthens. ATA truck tonnage remains subdued.

Ned Davis Research | Economics | U.S. Daily Perspectives NL | Daily

Why bond investors shouldn't get complacent

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European yields modestly reacting to bad news. The Fed's massive liquidity injection has ended. Bond investors shouldn't get complacent.

Ned Davis Research | Fixed Income | Focus | Bi-Weekly

Not enough divergences to be negative

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Russell 2000, Dow Transports, and Value Line Geometric fail to confirm. But, the daily A/D line has confirmed. A/D line has good record of peaking before prices. A look at Tesla.

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

Retail sales hold up, Boeing a drag on production

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Modest gain in retail sales. But strong consumer sentiment supports a positive outlook for spending growth. Industrial production shrinks again, as Boeing slashes production. Business inventory unwinding could weigh on GDP growth in the near-term.

Ned Davis Research | Economics | U.S. Daily Economic Perspectives | Daily

Retail sales hold up, Boeing a drag on production

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Modest gain in retail sales. But strong consumer sentiment supports a positive outlook for spending growth. Industrial production shrinks again, as Boeing slashes production. Business inventory unwinding could weigh on GDP growth in the near-term.

Ned Davis Research | Economics | U.S. Daily Perspectives NL | Daily

ISM shows more OptimISM!

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ISM data shows clearer "green shoots." If not overwhelmed by coronavirus, Global PMIs are also rising. Plenty of problems, but stabilization looks stronger.

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

Which regions perform best after global slowdowns?

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Given the constructive economic developments prior to the coronavirus outbreak, our view is that the global economic recovery has been delayed, not derailed. Among the MSCI regions/countries we tested, equity market recoveries were generally stronger after the end of severe global slowdowns compared to the less severe ones. Emerging markets have tended to be the decisive outperformer.

Ned Davis Research | Economics | Global Focus | Weekly

Upgrading equities to marketweight

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Shifting 5% exposure from bonds to stocks. Now marketweight stocks, 5% overweight bonds, 5% underweight cash. Overweight equity allocation would require confirmation from breadth, bond and Risk-On/Risk-Off indicators.

Ned Davis Research | Equities | Global Focus | Weekly

The rise of alternatives

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Public pension funds have massively increased their allocations to alternatives at the expense of traditional stocks and bonds. Plan performance has been decent, although return assumptions have steadily declined. We question whether these alternative investments will be able to deliver the returns public funds expect over time.

Ned Davis Research | Fixed Income | Focus | Bi-Weekly

Industry performance around global health emergencies

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"Public place" and other select sub-industries often underperform, and then mean revert, around WHO global health emergencies. We created an index to help with the timing of buying industries that often see relief rallies following health emergencies. Our index has bottomed 26 market days following emergencies, on average.

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

Inflation remains under wraps

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CPI inflation up modestly, led by shelter. Suggests Fed to remain on hold. Jobless claims continue to hover near lowest level since 1969. Consumer comfort off slightly for the week, but trend still up.

Ned Davis Research | Economics | U.S. Daily Economic Perspectives | Daily

Inflation remains under wraps

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CPI inflation up modestly, led by shelter. Suggests Fed to remain on hold. Jobless claims continue to hover near lowest level since 1969. Consumer comfort off slightly for the week, but trend still up.

Ned Davis Research | Economics | U.S. Daily Perspectives NL | Daily

Closing USO Recommendation

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NDR recently downgraded its outlook for crude oil from bullish to neutral. With crude futures curve now in contango, the U.S. Oil Fund (USO) is likely to underperform crude oil.

Ned Davis Research | ETF Selection | Highlights | Weekly

Capex growth to remain muted in 2020

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We project a modest 2.1% increase in real capex in 2020. Leading indicators imply continued capex weakness in 1H 2020, exacerbated by coronavirus, but a rebound in 2H 2020. Trade and policy uncertainty have receded, but continue to present downside risks to the outlook.

Ned Davis Research | Economics | U.S. Focus | Monthly

Stocks' rise not about earnings fundamentals

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Average stock based upon the Value Line Composite rose moderately over the last year. But, Value Line P/E has risen rather sharply. Thus, even with buy-backs, average stocks' earnings fell!

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

S&P 600 versus Russell 2000

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The S&P 600 is a higher quality small-cap benchmark than the Russell 2000, based on the percentage of unprofitable companies. There are challenges to any small-cap benchmark, so we favor large over small. Despite their relative weakness, small-cap breadth remains strong, a positive for the broad market.

Ned Davis Research | Equities | U.S. Focus | Weekly

Small business optimism continues to rise

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NFIB Index points to rising business optimism and continued economic growth. Job openings decline to a two-year low, but labor market still tight. Weekly retail sales grow close to trend.

Ned Davis Research | Economics | U.S. Daily Economic Perspectives | Daily

Small business optimism continues to rise

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NFIB Index points to rising business optimism and continued economic growth. Job openings decline to a two-year low, but labor market still tight. Weekly retail sales grow close to trend.

Ned Davis Research | Economics | U.S. Daily Perspectives NL | Daily

Reiterating OW on EM bonds

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EM continues to outperform both the Global and U.S. markets. Valuations are reasonable. Fundamentals are favorable with inflation low and yields falling. Technicals remain strong, with positive momentum and seasonal tailwinds.

Ned Davis Research | Fixed Income | Focus | Bi-Weekly

Big inflows to stock and bond funds

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Largest weekly inflow of 2020 to stock ($18 billion) and bond ($7 billion) ETFs. 15-year low for Australia (EWA) relative to global equities. 58-week low for popular commodity ETF (DBC).

Ned Davis Research | ETF Selection | ETFs on the Move | Weekly

OECD U.S. CLI points to faster growth ahead

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OECD U.S. CLI up by the most in eight years, as outlook for growth in early 2020 strengthens. ETI suggests payrolls will continue to increase, despite tight labor markets.

Ned Davis Research | Economics | U.S. Daily Economic Perspectives | Daily

OECD U.S. CLI points to faster growth ahead

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OECD U.S. CLI up by the most in eight years, as outlook for growth in early 2020 strengthens. ETI suggests payrolls will continue to increase, despite tight labor markets.

Ned Davis Research | Economics | U.S. Daily Perspectives NL | Daily

Oil, Energy, tankers & the coronavirus

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The Wuhan coronavirus is a true black swan for the oil and energy markets. Investors must resist the urge to become epidemiological tourists. Instead rely on objective indicators.

Ned Davis Research | Commodities | Focus | Monthly

Momentum alert and market concentration

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Year-to-year change in Value Line Index yields overbought sell alert. Facebook, Apple, Netflix, Microsoft, Amazon, and Google soar - does it mean anything? Big Mo Tape still leans bullish.

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

Job gains continue to astound

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Broad-based gains in nonfarm payrolls. Wage growth accelerates. Participation rate rises to highest since June 2013. Fed policy remains on hold.

Ned Davis Research | Economics | U.S. Daily Perspectives NL | Daily

Job gains continue to astound

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Broad-based gains in nonfarm payrolls. Wage growth accelerates. Participation rate rises to highest since June 2013. Fed policy remains on hold.

Ned Davis Research | Economics | U.S. Daily Economic Perspectives | Daily

Rating the Fed - mixed and incomplete grades

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The Fed has been very successful inflating asset prices. But, the Fed has failed to meet its 2% core PCE inflation goal. Long cyclical expansion, but subpar. Still watching metals for price "proof."

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

Monthly sector update - February 2020

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Coronavirus fears drove down rates, helping Utilities and Real Estate outperform. Despite virus concerns, several Tech companies outperformed. We shifted more cyclical, and our weighted recommendation beta is now above 1.0.

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

Nonfarm productivity recovering

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2019 productivity growth best since 2010. Trend contributes to faster potential output growth and low inflation. Layoff trends show labor market conditions remain tight. Consumer comfort off slightly for the week, but level still supports a positive outlook for spending growth.

Ned Davis Research | Economics | U.S. Daily Economic Perspectives | Daily

Nonfarm productivity recovering

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2019 productivity growth best since 2010. Trend contributes to faster potential output growth and low inflation. Layoff trends show labor market conditions remain tight. Consumer comfort off slightly for the week, but level still supports a positive outlook for spending growth.

Ned Davis Research | Economics | U.S. Daily Perspectives NL | Daily

New infographic! Where the U.S. economy stands

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We analyze 12 sub-cycles and the overall cycle. Real GDP growth slowing back toward trend. Tight labor markets and favorable financial conditions support consumption and housing.

Ned Davis Research | Economics | U.S. Focus | Monthly

Is it time to get back into loans?

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Before the coronavirus fear soared, loans were looking relatively attractive compared with high yield. But valuation is not a sufficient condition to favor loans over high yield. Loans perform best when rates are rising. Higher rates do not look likely anytime soon. Credit risks remain elevated.

Ned Davis Research | Fixed Income | Focus | Bi-Weekly

ISM services activity strengthens

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ISM NMI up in January, indicating faster services and overall economic growth at the start of 2020. ADP private payrolls surge. Broad-based job gains by industry and firm size. Trade deficit shrinks in 2019 for the first time in six years.

Ned Davis Research | Economics | U.S. Daily Economic Perspectives | Daily

ISM services activity strengthens

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ISM NMI up in January, indicating faster services and overall economic growth at the start of 2020. ADP private payrolls surge. Broad-based job gains by industry and firm size. Trade deficit shrinks in 2019 for the first time in six years.

Ned Davis Research | Economics | U.S. Daily Perspectives NL | Daily

2020 Commercial real estate outlook

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Expect modest appreciation and a total return around 6%. Expect the Industrial sector to continue to outperform but by a smaller margin. Continue to underweight Retail. Stick with quality.

Ned Davis Research | Economics | U.S. Focus | Monthly

January 2020 sentiment/valuation update

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Stocks remain very overvalued even with Q4 earnings now coming in above estimates. Sentiment remains overly optimistic. Stocks are stretched and cash is low.

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

Coronavirus in context of sentiment, valuations, and breadth

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The coronavirus has knocked the froth off investor sentiment, but has not generated the level of pessimism seen after previous WHO emergencies. Besides sentiment, most indicators were positive before the health scare. Breadth remains positive even for laggards Value and small-caps.

Ned Davis Research | Equities | U.S. Focus | Weekly

Light vehicle sales near steady

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Light truck sales continue to dominate the market. Vehicle sales outlook positive on solid consumer fundamentals. Factory orders rebound, but lack underlying strength. State leading indexes improve, implying no recession in the near-term.

Ned Davis Research | Economics | U.S. Daily Economic Perspectives | Daily

Light vehicle sales near steady

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Light truck sales continue to dominate the market. Vehicle sales outlook positive on solid consumer fundamentals. Factory orders rebound, but lack underlying strength. State leading indexes improve, implying no recession in the near-term.

Ned Davis Research | Economics | U.S. Daily Perspectives NL | Daily

Bond performance around health emergencies

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Treasury bond prices tended to peak just before the announcement and stabilize afterward. The yield curve tended to flatten modestly prior to the announcement before stabilizing. Credit spreads have narrowed in the weeks leading up to the WHO declaration.

Ned Davis Research | Fixed Income | Focus | Bi-Weekly

Global recovery intact before coronavirus

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The global manufacturing PMIs began the year with continued signs of a global economic recovery. Conditions either steadied or improved among most parts of the world. With the coronavirus outbreak not yet evident in the January data, we expect temporary weakness going forward until the virus is contained.

Ned Davis Research | Economics | Global Focus | Weekly

ETF Model lifts equity exposure to 72%

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Improvement in global macro indicators triggered a shift in top-level allocation to 72% equities / 28% bonds. The Invesco QQQ ETF remains the heaviest-weighted fund in the model at 22%. The model eliminated exposure to EM equities (IEMG) and high yield bonds (JNK).

Ned Davis Research | ETF Selection | Model Update | Monthly

ISM manufacturing back in positive territory

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Factory activity strengthens, led by rebounds in production and new orders. Employment growth still negative. Construction spending weakens at the end of 2019.

Ned Davis Research | Economics | U.S. Daily Perspectives NL | Daily

ISM manufacturing back in positive territory

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Factory activity strengthens, led by rebounds in production and new orders. Employment growth still negative. Construction spending weakens at the end of 2019.

Ned Davis Research | Economics | U.S. Daily Economic Perspectives | Daily

Leadership trends continue

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All-time highs for U.S. (IEF, GOVT, IEI, TLH) and International (BNDX) bond funds. New all-time highs relative to global equities for U.S. (VTI), U.S. Growth (IVW), and tech-software (IGV). New all-time low relative to global equities for Emerging Markets (VWO).

Ned Davis Research | ETF Selection | ETFs on the Move | Weekly

Breadth thrust update one year later

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Nearly all of our breadth thrust indicators gave buys in January 2019. All of these signals were closed out profitably. Trend evidence still leans bullish. But, Dow Jones Transports and Russell 2000 still have not made new highs.

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

Employment costs remain subdued

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Steady growth in employment costs suggests a lack of strong upward pressures on core inflation. Moderate income and consumer spending growth support the economic expansion. Regional factory activity indexes suggest manufacturing is stabilizing.

Ned Davis Research | Economics | U.S. Daily Perspectives NL | Daily

Employment costs remain subdued

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Steady growth in employment costs suggests a lack of strong upward pressures on core inflation. Moderate income and consumer spending growth support the economic expansion. Regional factory activity indexes suggest manufacturing is stabilizing.

Ned Davis Research | Economics | U.S. Daily Economic Perspectives | Daily

Fab Five Monetary Composite still bullish

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"Don't Fight the Fed" is now a popular rule for good reason. NDR's Monetary Composite is still bullish. What to watch that could change things like commodity prices. Watching Baa yields or brokerage stocks.

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

Not all small-cap funds are created equal

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Median stock in the Vanguard Small-Cap ETF (VB) is more than 3x as large as the median stock in the iShares Russell 2000 ETF (IWM). Sector weights amongst the most popular small-cap ETFs can also vary greatly. Cap and sector differences help explain the recent outperformance of VB.

Ned Davis Research | ETF Selection | Highlights | Weekly

U.S. ends 2019 with steady GDP growth

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Slower consumer spending growth and continued decline in capex and inventory investment in Q4. But a slump in imports boosted the net trade contribution to real GDP growth. Residential investment and government spending also picked up.

Ned Davis Research | Economics | U.S. Daily Economic Perspectives | Daily

U.S. ends 2019 with steady GDP growth

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Slower consumer spending growth and continued decline in capex and inventory investment in Q4. But a slump in imports boosted the net trade contribution to real GDP growth. Residential investment and government spending also picked up.

Ned Davis Research | Economics | U.S. Daily Perspectives NL | Daily

Rising fear and bond prices, equities retreat

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Bond benchmark back at new highs as economic worries increase. VIX reflects rising fear, inversely correlated with bond yields and stock prices. VIX included in "Watch" reports, helping assess market risk.

Ned Davis Research | Equities | Global Focus | Weekly

Sector model modification

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Enhancing sector model indicators within Health Care and Financials. Post update, Health Care's composite score is little changed, while Financials' score has risen meaningfully. The model remains marketweight both sectors.

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

The interest rate cycle and sector allocation

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Overweight cyclical sectors at an interest rate trough, and overweight defensive sectors at an interest rate peak. When the Fed is hiking rates, overweight the Energy, Materials, Information Technology and Health Care sectors. When the Fed is cutting rates, overweight the Consumer Discretionary, Consumer Staples, Utilities, and Financials sectors.

Ned Davis Research | Special Report | Mixed

Is corporate credit expensive?

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Traditional measures such as OAS show corporate credit is historically expensive. Other measures also show increased risk. The spread per unit of duration is historically low, while credit risk has increased. Should spreads fall to the levels of the mid-1990s, it would clearly indicate elevated levels of risk.

Ned Davis Research | Fixed Income | Focus | Bi-Weekly

Small-caps' fundamental problem

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Small-caps are less profitable and more leveraged than large-caps. The problem is more pronounced in the Russell 2000 than our small-cap data set, partly due to the drop in the number of publicly traded stocks. The incentives to stay private longer have reduced one of the benefits of owning small-caps.

Ned Davis Research | Equities | U.S. Focus | Weekly

State conditions weaken, but no recession

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Weaker economic conditions across more states. But recession risk for the broad economy still low. Goods trade deficit widens at yearend. Net exports still expected to add to Q4 GDP growth. Pending home sales slide, but mortgage apps suggest a rebound in the coming months.

Ned Davis Research | Economics | U.S. Daily Perspectives NL | Daily

State conditions weaken, but no recession

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Weaker economic conditions across more states. But recession risk for the broad economy still low. Goods trade deficit widens at yearend. Net exports still expected to add to Q4 GDP growth. Pending home sales slide, but mortgage apps suggest a rebound in the coming months.

Ned Davis Research | Economics | U.S. Daily Economic Perspectives | Daily

Combine fcf yield and earnings revisions

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Free cash flow yield and earnings revisions historically outperform as earnings outlook improves. Select companies based on free cash flow yield, cash position, price momentum, EPS growth/stability, and earnings revisions. Favored stocks include: Microsoft, Facebook, Visa, Intel, Adobe, Bristol-Myers Squibb, Morgan Stanley.

Ned Davis Research | Stock Selection | U.S. Portfolio Strategy | Monthly

Keep it simple, stupid!

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Public bailing out of all funds is bullish. But, public jumping into ETFs is bearish. Data is confusing and more evidence is needed. But, sentiment/valuation still shows high risks.

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

Capex goods orders sag

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Strong defense spending supports durable goods orders. But nondefense and core orders sag, a sign of weak capex demand. Consumer confidence near highest level since 2000. Supports a positive outlook for consumer spending growth. Existing home price growth strengthens.

Ned Davis Research | Economics | U.S. Daily Economic Perspectives | Daily

Capex goods orders sag

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Strong defense spending supports durable goods orders. But nondefense and core orders sag, a sign of weak capex demand. Consumer confidence near highest level since 2000. Supports a positive outlook for consumer spending growth. Existing home price growth strengthens.

Ned Davis Research | Economics | U.S. Daily Perspectives NL | Daily

Who's buying bonds?

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Households, through mutual funds and ETFs, have been record buyers. Foreign demand has waned. The Fed resumed large-scale asset purchases in October, freeing up funds for other buyers. Banks resumed securities purchases, particularly MBS.

Ned Davis Research | Fixed Income | Focus | Bi-Weekly

Should you worry about coronavirus?

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Health emergency announcements are usually a lagging indicator. Past health emergencies have coincided with other major market events, exaggerating their impact. A SARS like outbreak could have major implications on the Chinese, and thus global, economy. But the response to the current virus has been much better.

Ned Davis Research | Economics | Global Focus | Weekly

Rate Retreat

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New all-time highs for the two largest bond ETFs (AGG, BND). Telecom (IYZ) and REITs (ICF) broke to significant new highs as investors search for yield. Three-year high for Global Gold Miners (RING).

Ned Davis Research | ETF Selection | ETFs on the Move | Weekly

New home sales dip

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Modest decline in new home sales at yearend, but longer-term upward trend intact. Texas manufacturing stabilizing, in line with other regional activity indexes.

Ned Davis Research | Economics | U.S. Daily Economic Perspectives | Daily

New home sales dip

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Modest decline in new home sales at yearend, but longer-term upward trend intact. Texas manufacturing stabilizing, in line with other regional activity indexes.

Ned Davis Research | Economics | U.S. Daily Perspectives NL | Daily

Oil: What works?

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We are downgrading our oil outlook from bullish to neutral. Despite repeated geopolitical flare-ups, a sustainable oil rally has failed to materialize. Our Total Petroleum Inventory Model is now on a sell. Hedge Fund positioning is showing excessive optimism.

Ned Davis Research | Commodities | Focus | Monthly

Impressive new highs versus new lows

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NDR volume demand and weekly new highs hit new highs, since the 2018 lows. But, the 2018 lows may not perfectly qualify as bear market lows. In any case, I believe they are impressive and trend evidence continues to lean bullish.

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

Stronger services activity at the start of 2020

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Markit U.S. flash services PMI up, but manufacturing PMI dips.

Ned Davis Research | Economics | U.S. Daily Perspectives NL | Daily

Stronger services activity at the start of 2020

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Markit U.S. flash services PMI up, but manufacturing PMI dips.

Ned Davis Research | Economics | U.S. Daily Economic Perspectives | Daily

Inflation relatively low - can still be a problem

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Inflation is relatively low at 2.3% (CPI and core CPI). But, it has risen a little, leaving stocks and bonds slightly less attractive. Gold bulls may be happy. Inflation has also cut into wage growth leaving consumers barely ahead in real terms.

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

Some pros and cons of the phase-one trade deal

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The phase-one trade deal with China could boost U.S. real GDP growth by 0.5% in 2020 and 2021. But questions remain with respect to the feasibility of the export goals, particularly for energy and agricultural products. Trade uncertainty has been reduced, but not eliminated, restraining capex and economic growth.

Ned Davis Research | Economics | U.S. Focus | Monthly

Leading indicators weaken

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LEI suggests weaker economic growth in 1H 2020. But high consumer comfort and tight labor markets push against a negative narrative. K.C. Fed manufacturing activity stabilizes.

Ned Davis Research | Economics | U.S. Daily Economic Perspectives | Daily

Leading indicators weaken

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LEI suggests weaker economic growth in 1H 2020. But high consumer comfort and tight labor markets push against a negative narrative. K.C. Fed manufacturing activity stabilizes.

Ned Davis Research | Economics | U.S. Daily Perspectives NL | Daily

What emerging markets tell us about Materials

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Historically, emerging market (EM) outperformance has been bullish for commodity sectors. EM outperformance led by EM commodity sectors is the truly bullish signal. Currently, EM consumer sectors are outperforming EM commodity sectors, and we remain cautious on U.S. commodity sectors.

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

Is foreign bond demand waning?

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Foreign demand for U.S. bonds has waned over the past year. Domestic investors have picked up some of the slack. European investors have repatriated some of their U.S. bonds due to high hedging costs and European hedging rules. Japan, however, appears to be buying unhedged U.S. positions.

Ned Davis Research | Fixed Income | Focus | Bi-Weekly

Update: The real passive bubble

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Tanger Factory Outlets (SKT) has the highest percentage of its shares held by ETFs. The SPDR Dividend ETF (SDY), holds roughly a quarter of SKT's float. At the end of the month, SDY will be forced to unload its position in SKT. We will soon get a sense for how much SDY's large passive stake was impacting Tanger's stock price.

Ned Davis Research | ETF Selection | Highlights | Weekly

Rare earnings recovery

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S&P 500 EPS growth ended its fifth-longest streak of 10% growth in Q3 2019. Quick earnings rebounds have occurred during mature expansions, like today. Our earnings model and top-down outlook support modest EPS growth and market gains in 2020.

Ned Davis Research | Equities | U.S. Focus | Weekly

Existing home sales rebound

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Stronger home sales and price growth at yearend, amid tight inventories. A pickup in architecture billings suggests a rebound in nonresi construction spending in 2H 2020. CFNAI shows growth remained below trend in Q4.

Ned Davis Research | Economics | U.S. Daily Economic Perspectives | Daily

Existing home sales rebound

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Stronger home sales and price growth at yearend, amid tight inventories. A pickup in architecture billings suggests a rebound in nonresi construction spending in 2H 2020. CFNAI shows growth remained below trend in Q4.

Ned Davis Research | Economics | U.S. Daily Perspectives NL | Daily

Some recent short-term sentiment extremes

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Very high optimism on commodities. Gold is rising after extreme pessimism - now neutral. Bonds have the least optimism in over a year. Stocks have extreme optimism.

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

Favor price momentum around market highs

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Pick stocks with stronger price momentum, lower semivariance, greater shareholder yield, and higher free cash flow yield. Favored Stocks Include: Roche, Novo Nordisk, Air Liquide, Safran, British American Tobacco, Relx, Compass Group, Tesco.

Ned Davis Research | Stock Selection | Europe Portfolio Strategy | Monthly

Bond demand off the chart!

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Net inflows into bond mutual funds and ETFs surged a record $24.7 billion in the first week of the year. Record inflows were seen for both taxable and municipal bonds. All of the mutual funds money came from equity funds, which saw a net outflow of $24.6 billion. Portfolio rebalancing and demographics were responsible for the bond inflows.

Ned Davis Research | Fixed Income | Focus | Bi-Weekly

Moving average studies

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Cyclical trend in stocks is up. Commodities are improving in trend. Dollar is questionable.

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

Utilities drag industrial production down

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Industrial production fell at yearend. But manufacturing rose. Should get a boost in 2020 from trade deal. Housing starts surged at yearend. Trends bode well for residential investment growth in 2020. Consumer sentiment stable. Supports an outlook for steady spending growth this year.

Ned Davis Research | Economics | U.S. Daily Economic Perspectives | Daily

Utilities drag industrial production down

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Industrial production fell at yearend. But manufacturing rose. Should get a boost in 2020 from trade deal. Housing starts surged at yearend. Trends bode well for residential investment growth in 2020. Consumer sentiment stable. Supports an outlook for steady spending growth this year.

Ned Davis Research | Economics | U.S. Daily Perspectives NL | Daily

Some interesting macro charts

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Population growth continues to fall and core capital goods orders are weak. ISM New Orders and Ifo World Climate Index are weak. But CEO confidence, trade deficit, and ISM composite improve.

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

Signs of complacency

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SPY hasn't had a 1% down days since early October. Short-term sentiment is reversing from an 18-month high. Reflationary narrative may be tested with crude and rates showing weakness.

Ned Davis Research | ETF Selection | Highlights | Weekly

Shifting toward cyclical growth

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Consumer Discretionary up to marketweight, Real Estate and Consumer Staples to underweight. Health Care, Com Services, and Technology now 150+ bps above benchmark. Strong Nasdaq 100 performance highlights investors' preference for Growth stocks in tech and consumer-related industries.

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

Dangerous concentration and complacency

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Increasingly concentrated advance with lack of broad market confirmation. As megacaps in Tech sector and U.S. have dominated, their valuations have worsened in both absolute and relative terms. Earnings optimism and complacent sentiment leaves equities vulnerable if fundamental and macro data fail to meet expectations.

Ned Davis Research | Equities | Global Focus | Weekly

Broad-based signs of economic recovery

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The global economy is showing its most decisive signs of improvement in over two years. This is supported by aggregate measures as well as rising global breadth. Our analysis implies an end to the global slowdown in the first half of this year.

Ned Davis Research | Economics | Global Focus | Weekly

Steady growth in retail sales

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Retail sales maintain a steady pace amid tight labor markets and high consumer confidence. Builder confidence still near highest since 1999. Implies a pickup in housing starts. Philly Fed manufacturing strengthens.

Ned Davis Research | Economics | U.S. Daily Perspectives NL | Daily

Steady growth in retail sales

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Retail sales maintain a steady pace amid tight labor markets and high consumer confidence. Builder confidence still near highest since 1999. Implies a pickup in housing starts. Philly Fed manufacturing strengthens.

Ned Davis Research | Economics | U.S. Daily Economic Perspectives | Daily

The tenth rule

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Our 3 key rules are: Don't fight the tape, Don't fight the Fed, and Beware of the crowd at extremes. There are six additional, but less familiar, rules that are also important. I added a 10th rule - Don't fight the government, which is becoming increasingly important in determining economic performance.

Ned Davis Research | Fixed Income | Focus | Bi-Weekly

Producer price inflation weak

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Subdued PPI and CPI inflation pressures suggest no change in Fed policy. Empire manufacturing activity stuck in low gear. Mortgage applications surge, reflecting strong housing demand at the start of 2020.

Ned Davis Research | Economics | U.S. Daily Economic Perspectives | Daily

Producer price inflation weak

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Subdued PPI and CPI inflation pressures suggest no change in Fed policy. Empire manufacturing activity stuck in low gear. Mortgage applications surge, reflecting strong housing demand at the start of 2020.

Ned Davis Research | Economics | U.S. Daily Perspectives NL | Daily

Stock sentiment, long-term to short-term

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Most cyclical sentiment indicators are very stretched. But, there are a few contrary signs. Short-term sentiment extremely optimistic.

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

The changing nature of consumer spending

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Tight labor markets, high consumer confidence, favorable credit conditions, and a wealth effect support a positive outlook for PCE growth in 2020. Consumers are spending less on goods and more on services, e.g., health care, which smoothes the economic cycle. Increase in government transfers, e.g., retirement income, aids in income and spending predictability.

Ned Davis Research | Economics | U.S. Focus | Monthly

Consumer price inflation remains subdued

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CPI inflation up only slightly. Small business optimism declines at yearend, but still elevated. Budget deficit continues to expand.

Ned Davis Research | Economics | U.S. Daily Economic Perspectives | Daily

Consumer price inflation remains subdued

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CPI inflation up only slightly. Small business optimism declines at yearend, but still elevated. Budget deficit continues to expand.

Ned Davis Research | Economics | U.S. Daily Perspectives NL | Daily

Large-cap Growth leads market to new highs

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Aligning with our models, we are shifting our tactical recommendation back to Growth over Value from neutral. Broad market breadth is bullish, with small-caps a weak spot. We are raising our yearend 2020 S&P 500 target to 3425 from 3325.

Ned Davis Research | Equities | U.S. Focus | Weekly

What matters most for macro?

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QE and global liquidity pushing risk assets higher. We introduce new indicators and charts on security purchases and bank credit for the Fed, ECB, and BOJ. We provide an update on repo and the Fed's asset purchases.

Ned Davis Research | Fixed Income | Focus | Bi-Weekly

Oil - False breakout?

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In the months since our September upgrade, hedge funds have covered shorts and the U.S. has taken out Iranian General Qasem Soleimani. Despite the bullish catalysts, oil is flat. We remain bullish, but skeptical of the recent breakout.

Ned Davis Research | Commodities | Focus | Monthly

Employment trends slow

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ETI points to continued, albeit moderate, job creation ahead. OECD U.S. CLI suggests economic prospects are looking up.

Ned Davis Research | Economics | U.S. Daily Economic Perspectives | Daily

Employment trends slow

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ETI points to continued, albeit moderate, job creation ahead. OECD U.S. CLI suggests economic prospects are looking up.

Ned Davis Research | Economics | U.S. Daily Perspectives NL | Daily

Large-Cap Growth Dominance Continues

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19-year high for Russell 1000 Growth (IWF) relative to global equities. Significant new relative strength lows for Large-Cap Value (VLV), Mid-Caps (IJH), Small-Caps (IJR), and European equities (EZU).

Ned Davis Research | ETF Selection | ETFs on the Move | Weekly

Volume precedes price

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Volume demand is well above volume supply. Volume demand usually peaks before prices. Double digit hypothetical gains when volume demand is above volume supply.

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

Jobs growth returning to trend

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Jobs machine slowing, as pool of available labor is drying up. Wage growth surprisingly weakens. We expect no change in monetary policy.

Ned Davis Research | Economics | U.S. Daily Economic Perspectives | Daily

Jobs growth returning to trend

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Jobs machine slowing, as pool of available labor is drying up. Wage growth surprisingly weakens. We expect no change in monetary policy.

Ned Davis Research | Economics | U.S. Daily Perspectives NL | Daily

Again like the early '90s ... but which part?

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Watching for indicators to confirm a sustainable global market advance, like in 1993. Recognize excessive optimism, stretched valuations, and less favorable equal-weighted perspective. Watch oil prices and their correlations to market; also dollar, gold and emerging markets.

Ned Davis Research | Equities | Global Focus | Weekly

Signs of stabilization at home and globally

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The economy clearly weakened during 2019. But, there were signs of stabilization late in the year. I am still waiting for more data to turn positive on growth rates.

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

Consumer comfort highest since 2000

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Rising consumer comfort supports a positive outlook for spending growth in 2020. Jobless claims decline, as labor market remains tight.

Ned Davis Research | Economics | U.S. Daily Economic Perspectives | Daily

Consumer comfort highest since 2000

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Rising consumer comfort supports a positive outlook for spending growth in 2020. Jobless claims decline, as labor market remains tight.

Ned Davis Research | Economics | U.S. Daily Perspectives NL | Daily

Macro drivers and risks

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Four fundamental drivers largely explained last decade's performance: inflation, economic growth, demographics, and technological change. These four factors will continue to be felt in the new decade. The biggest macro risks are geopolitical, U.S. politics, inflation, asset bubbles, and disruption of technology.

Ned Davis Research | Fixed Income | Focus | Bi-Weekly

Signs of life in Europe?

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After two years of deteriorating momentum, we are beginning to observe signs that economy may be carving out a bottom. The recent data improvement has been associated with stronger equity market performance and higher bund yields. Despite these pieces of good news, we wouldn't get too excited about sustained upside in the eurozone.

Ned Davis Research | Economics | Global Focus | Weekly

ADP private payrolls jump at yearend

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ADP payrolls stronger in December, but hiring trend still moderates amid tight labor market conditions. Mortgage applications rise. Used vehicle prices normalize, which could add to CPI inflation this year.

Ned Davis Research | Economics | U.S. Daily Perspectives NL | Daily

ADP private payrolls jump at yearend

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ADP payrolls stronger in December, but hiring trend still moderates amid tight labor market conditions. Mortgage applications rise. Used vehicle prices normalize, which could add to CPI inflation this year.

Ned Davis Research | Economics | U.S. Daily Economic Perspectives | Daily

Estimated 2019 ending valuations

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S&P 500 price/earnings ratios are well above "fair value." But P/E looks relatively worse using overall profits. Price/sales are at record highs.

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

Monthly sector update - January 2020

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Both cyclical Energy and Technology, as well as defensive Health Care and Utilities outperformed in December. We saw a bias toward global over domestic in sector performance. Holiday sales were better than expected, and we will likely lift our Discretionary underweight soon.

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

ISM services activity strengthens

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Firmer ISM services activity offsets manufacturing weakness. CEO confidence improves, but trend still implies weak capex growth in 2020. Light vehicle sales miss expectations. Trade deficit shrinks.

Ned Davis Research | Economics | U.S. Daily Economic Perspectives | Daily

ISM services activity strengthens

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Firmer ISM services activity offsets manufacturing weakness. CEO confidence improves, but trend still implies weak capex growth in 2020. Light vehicle sales miss expectations. Trade deficit shrinks.

Ned Davis Research | Economics | U.S. Daily Perspectives NL | Daily

Global bond market outlook for 2020

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Yields range-bound to modestly higher. We remain focused on Europe, particularly Germany. High bar for policy change at the major central banks over the intermediate-term. Should see some steepening of global yield curves. Credit should remain well-supported and spreads tight.

Ned Davis Research | Fixed Income | Focus | Bi-Weekly

Charts of the decade: 15 charts that tell the story of the 2010s

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Stocks outperformed other asset classes, with the S&P 500 never experiencing a 20% drawdown. The U.S. economy went the entire decade without a recession for the first time on record. Underpinning it all were central banks by keeping rates low and balance sheets large.

Ned Davis Research | Special Report | Mixed

Gold is shining

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Iranian conflict helped push gold prices (GLD) to a six-year high. TIPS (TIP) and Muni Bonds (MUB) made new all-time highs on a total return basis. On a relative basis, growth (MGK) is breaking out and value (IWD) is breaking down.

Ned Davis Research | ETF Selection | ETFs on the Move | Weekly

My technical look at global trends

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Global Big Mo Tape leans bullish. Most global markets have rising 200-day averages. Intermediate-term trends lean bullish as well. Emerging market trends are mixed to higher.

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

Manufacturing contraction deepens

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ISM Manufacturing Index drops to lowest level since June 2009. Construction spending up, led by public projects and housing. NYC services activity declines steeply.

Ned Davis Research | Economics | U.S. Daily Economic Perspectives | Daily

Manufacturing contraction deepens

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ISM Manufacturing Index drops to lowest level since June 2009. Construction spending up, led by public projects and housing. NYC services activity declines steeply.

Ned Davis Research | Economics | U.S. Daily Perspectives NL | Daily

Global manufacturing ends the year positive

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The latest global manufacturing PMIs continue to suggest a modest recovery in the global economy in early 2020. The recovery broadened while leading indicators point to a more upbeat outlook. Asia is showing signs of life, the U.S. continues to expand, while conditions in Europe deteriorated.

Ned Davis Research | Economics | Global Focus | Weekly

A look at corporate debt

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Corporate debt for stock purchases leverages balance sheets. Corporate debt to GDP is at record highs. Yet, debt service is reasonably low. And, Joe Kalish and Ed Clissold are not very concerned.

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

Benchmark Review: Asset classes reflate!

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Easy monetary policies led to the strongest cross-asset class gains since 2009. The S&P 500 posted its biggest gain since 2013 and second-best year since 2000. All nine Russell style boxes gained at least 20% in 2019. All seven major regions and 10/11 sectors gained at least 10%.

Ned Davis Research | Equities | U.S. Benchmarks | Quarterly

Sector stories of the decade

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We believe the story of sectors for the decade can be told in two halves. The first half (2010-2014) was driven by consumer and broad capital spending. The second half (2015-2019) was driven by consumer and more narrow intellectual property capital spending.

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

After lopsided year, keep watching the flows

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Record highs in bond inflows relative to stock inflows. Cyclical caution for stocks, but secular potential. More secular risk for bonds. Watch rising inflows to emerging markets and gold.

Ned Davis Research | Equities | Global Focus | Weekly

Markit U.S. manufacturing PMI off slightly

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Factory activity recovers at a slightly slower pace. Layoffs and jobless claims show labor market remains tight. Consumer comfort up, supporting a positive outlook for spending growth in 2020.

Ned Davis Research | Economics | U.S. Daily Economic Perspectives | Daily

Markit U.S. manufacturing PMI off slightly

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Factory activity recovers at a slightly slower pace. Layoffs and jobless claims show labor market remains tight. Consumer comfort up, supporting a positive outlook for spending growth in 2020.

Ned Davis Research | Economics | U.S. Daily Perspectives NL | Daily

Consumer confidence still elevated

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High consumer confidence suggests consumer spending will continue to drive economic growth in 2020. Fewer states projected to expand in 1H 2020, but national economy still edging up. Existing home prices firming.

Ned Davis Research | Economics | U.S. Daily Economic Perspectives | Daily

Consumer confidence still elevated

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High consumer confidence suggests consumer spending will continue to drive economic growth in 2020. Fewer states projected to expand in 1H 2020, but national economy still edging up. Existing home prices firming.

Ned Davis Research | Economics | U.S. Daily Perspectives NL | Daily

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