Public Publication Content

Recent Publications

The real passive bubble

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Little evidence that the popularity of passive investing is inflating the value of mega-cap tech stocks. The "crowded theater" warning is more appropriate for the bond proxy sectors. Tanger Factory Outlet Centers (SKT) is the poster child for the passive bubble.

Ned Davis Research | ETF Selection | Highlights | Weekly

Consumer sentiment remains steady

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Consumer sentiment continues to hover around historic highs. Housing affordability falls due to higher home prices.

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

Consumer sentiment remains steady

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Consumer sentiment continues to hover around historic highs. Housing affordability falls due to higher home prices.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Pick stocks with greater earnings revisions

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Replacing lower debt/equity strategy with higher earnings revisions Complement earnings revisions with greater interest coverage, stronger price momentum, and higher free cash flow/enterprise value Favored Stocks Include: Nestle, Novartis, LVMH, Roche, Allianz, GlaxoSmithKline, Reckitt Benckiser, Prudential

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

Other macro/valuation indicators that work long-term

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Relative valuation works, but relatively poorly. Other macro indicators like Unemployment rate work so-so on a contrary basis. The output gap also has contrary record.

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

Is our Global Recession Model a contrarian indicator?

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Our global recession model, which remains in the high-risk zone, has typically not been a contrarian indicator for global equities. But after our model has shown a peak in the high-risk zone, equity market performance has historically been strong, as it's a sign that the economy is recovering. As of now, the evidence remains mixed that the global economy is bottoming.

Ned Davis Research | Economics | Global Focus | Monthly

Leading Indicators Slump

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The LEIs slumped in June, but recession risk remains slim. Philly Fed manufacturing activity rebounded, led by employment. Consumer comfort jumped, also likely fueled by stronger employment.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Leading Indicators Slump

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The LEIs slumped in June, but recession risk remains slim. Philly Fed manufacturing activity rebounded, led by employment. Consumer comfort jumped, also likely fueled by stronger employment.

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

Preparing for the next rate tantrum

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We are on watch for a strong reversal in bond sentiment after reaching extreme optimism (i.e. a rate tantrum). During recent rate tantrums, Financials and Tech performed best while Utilities and Real Estate performed the worst. Utilities is on watch for a downgrade and Financials an upgrade.

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

Housing starts and permits slip

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Housing starts and permits fell in June, led by multifamily units. The decline in architecture billings suggests weakening housing trends. Mortgage applications were mixed in June, but continue to rise on a y/y basis.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Housing starts and permits slip

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Housing starts and permits fell in June, led by multifamily units. The decline in architecture billings suggests weakening housing trends. Mortgage applications were mixed in June, but continue to rise on a y/y basis.

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

Gold optimism, but pessimism on gold stocks

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Optimism is rising in the stock market, but is not too excessive. Short-term optimism on gold is now excessive. But gold stocks are very pessimistic versus gold.

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

Consumer holding economy together

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Retail sales show broad-based gains in June. Drop in utility output masked rises in manufacturing and mining. Business optimism improved among homebuilders and service sector firms in NYC.

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

Consumer holding economy together

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Retail sales show broad-based gains in June. Drop in utility output masked rises in manufacturing and mining. Business optimism improved among homebuilders and service sector firms in NYC.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Position Review

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We are slightly long duration and recently recommended curve steepening trades. We are overweight MBS and favor TIPS and leveraged loans. We are overweight EM. Italy rejoined the peripheral debt trade. Increased exposure to the U.K., Europe, and the U.S. at Japan's expense.

Ned Davis Research | Fixed Income | Focus | Monthly

Stocks are expensive until you compare them to bonds

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S&P 500 P/E in most expensive quintile (20%) historically. Stocks are cheap relative to bonds. Absolute valuations have done a better job than relative ones of identifying stocks as cheap or expensive in the long run.

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

Does manufacturing matter?

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Manufacturing is still important but a lot less than it used to be. Intellectual property products are rising in significance. Capex contraction unlikely or limited.

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

Significant New Highs for Financials, Brazil, and Aerospace

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Financials, Brazil, and Aerospace funds all broke to significant new highs last week. Europe and Biotech funds continue to lag global equities. Equity ETFs took in $11 billion last week. 3rd largest weekly inflow of the year.

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

Empire manufacturing rebounds modestly

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Some stabilization in Empire factory conditions.

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

Empire manufacturing rebounds modestly

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Some stabilization in Empire factory conditions.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Tape plus Fed works globally

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More indicators on "Don't fight the tape and Fed." The Fab Five is still bullish. Similar readings for Europe, Japan, and China.

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

Producer price inflation eases

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Low PPI inflation supports a Fed rate cut this month. Government budget deficit keeps growing.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Producer price inflation eases

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Low PPI inflation supports a Fed rate cut this month. Government budget deficit keeps growing.

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

Still skeptical on employment

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I still see weakness in the economy. Signs point to the unemployment rate rising. There is weakness in workers' hours worked.

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

Into a challenging earnings season?

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Earnings season starts with stretched valuations, global economic slowdown continuing. Watch earnings revision trends, beat rates, trailing and forward earnings growth. Likely influence from Tech sector's season.

Ned Davis Research | Equities | Global Focus | Monthly

Millennials are buying homes

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Millennial homeownership rates are on the rise. We see the recent slowing in home sales as more cyclical than secular. We are buyers of home-related names on weakness.

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

Core CPI inflation firming slightly

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Despite a pickup in core CPI inflation, a Fed rate cut this month is a forgone conclusion. Trade and a weak global economy weigh on CEO confidence. But consumers comfort rebounds, as jobless claims drop.

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

Core CPI inflation firming slightly

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Despite a pickup in core CPI inflation, a Fed rate cut this month is a forgone conclusion. Trade and a weak global economy weigh on CEO confidence. But consumers comfort rebounds, as jobless claims drop.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Overbought sell signal

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S270 flashes an overbought sell signal. But DAVIS265 is not at excessive optimism. And Fed likely to ease.

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

What if it's one and done?

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Limited history shows higher rates and a flatter yield curve. Contrasts with mixed rates and steeper curve after first cut of an easing cycle. Still a good case for the Fed to cut rates twice in the coming months.

Ned Davis Research | Fixed Income | Focus | Monthly

A rare feat: Stocks and bonds up >10% in six months

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Stocks outperformed bonds over the next year in each of the 10 previous instances going back to 1945. In all 10 cases, stocks were higher one-year later, while bonds had positive returns 60% of the time. Tech and China funds have a high sensitivity to stock/bond relative strength and score well in our short-term and long-term relative strength rankings.

Ned Davis Research | ETF Selection | Highlights | Weekly

Wholesale inventories set to moderate

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Wholesale inventories rise at a slower rate, and projected to weigh on Q2 real GDP growth. Lower mortgage rates support home purchase and refi activity.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Wholesale inventories set to moderate

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Wholesale inventories rise at a slower rate, and projected to weigh on Q2 real GDP growth. Lower mortgage rates support home purchase and refi activity.

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

Thoughts on passive versus active investing

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Passive investing is a crowded trade. It makes it hard to go public, or for stocks outside of index to shine. A favorite valuation indicator of Warren Buffett is very stretched.

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

Profit picture for Q2 and into 2020

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Downward earnings revisions for Q2 were a mile wide and an inch deep. Outside of a data quirk in Q4, CY19 consensus is reasonable unless the economy falters. Higher inflation and faster economic growth will be needed to hit consensus estimates' modest reacceleration call for CY20.

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

What can a Fed rate cut do for the real economy?

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First Fed rate cuts are more effective in stimulating economic activity during recessions than during expansions. A rate cut now will be a positive for corporate and government debt management and stock prices. It can support consumer spending through increased confidence and a positive stock market wealth effect.

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

Trade war with China weighs on small business confidence

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Capex and employment plans decline. JOLTS report shows tight labor market conditions. Weekly retail sales soften slightly.

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

Trade war with China weighs on small business confidence

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Capex and employment plans decline. JOLTS report shows tight labor market conditions. Weekly retail sales soften slightly.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Downgrading Japan, upgrading Italy

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GFIAM moves decisively away from Japan. Expected interest rate differentials have moved against Japan. Upgrading Italy to overweight from marketweight.

Ned Davis Research | Fixed Income | Focus | Monthly

Energy: Approaching peak pessimism?

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Energy Sector's share of total market capitalization is now at the lowest point since 2001. The Sector is approaching the all-time low for market share set in 1999. However, looking only at the most oil-sensitive segments, Energy's share of total market cap is already at an all-time low.

Ned Davis Research | Commodities | Focus | Monthly

OECD U.S. CLI points to below-trend growth

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OECD U.S. CLI and employment trends suggest slower growth in 2H 2019. No upward pressure on CPI inflation from used vehicles.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

OECD U.S. CLI points to below-trend growth

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OECD U.S. CLI and employment trends suggest slower growth in 2H 2019. No upward pressure on CPI inflation from used vehicles.

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

Rest of the world joins the party

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Several ex-US equity ETFs closed the week at new highs for the year. South Korea ended the week at a 16-year low relative to global equities. High yield bond funds continue to see inflows. HYG and JNK have brought in over $4 billion in the past month.

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

Cycles, Big Mo Tape, supply/demand lean bullish

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The NDR cycle composite leans bullish until September. Big Mo Tape is moderately bullish. NDR volume supply/demand leans bullish, but momentum is poor.

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

Monthly Sector Update - July 2019

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Rate-sensitive industries underperformed in June despite falling 10-year yield. Trade-sensitive industries that were hit in May rebounded the most in June. Sector model remains defensive with Health Care and Consumer Staples as the only overweight recommendations.

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

Not Dead Yet!

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Robust jobs gains. Wage inflation remains subdued. Look for 25 bp rate cut and end to balance sheet runoff on July 31.

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

Not Dead Yet!

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Robust jobs gains. Wage inflation remains subdued. Look for 25 bp rate cut and end to balance sheet runoff on July 31.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

One year later, and still not safe to reallocate ... yet

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Bonds have outperformed stocks over past year, stock/bond downtrend intact. Stock rally lacking confirmation, optimism excessive. Stock decline could lead to reallocation opportunity.

Ned Davis Research | Equities | Global Focus | Monthly

Profits growth peaks at low level

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Actual overall corporate profits peaked in Q3 2018. It looks like profits growth peaked for S&P 500 last year. Leading index and ISM Composite predict more softness.

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

More signs of slower economic growth

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Slower services activity growth and a wider trade deficit weigh on Q2 GDP growth outlook. ADP payrolls and jobless claims still support tight labor market conditions.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

More signs of slower economic growth

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Slower services activity growth and a wider trade deficit weigh on Q2 GDP growth outlook. ADP payrolls and jobless claims still support tight labor market conditions.

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

June 2019 Sentiment/Valuation update

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DAVIS265 is skeptical and buy-backs are strong. Yet, stocks are overvalued. Also, cash reserves are low and consumer confidence is high.

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

The Fixed Income Easing Cycle Handbook

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Treasury yields have always declined and the yield curve has always steepened going into the first rate cut. Credit spreads tended to widen heading into the first rate cut. The term premium tended to increase modestly going into and after the first cut.

Ned Davis Research | Fixed Income | Focus | Monthly

State leading indexes point to continued expansion

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State leading indexes suggest continued but slower expansion ahead. Stagnating NYC services activity portends weakness at the national level. Weekly retail sales soft.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

State leading indexes point to continued expansion

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State leading indexes suggest continued but slower expansion ahead. Stagnating NYC services activity portends weakness at the national level. Weekly retail sales soft.

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

Global economy continues to deteriorate

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The global manufacturing PMIs continued to deteriorate in June as trade tensions remained elevated. The data, however, is not consistent with a severe global recession. Europe crowds the bottom of the ranks, while China brings parts of the world down with it.

Ned Davis Research | Economics | Global Focus | Monthly

Benchmark Review: Assets inflate amid central banks' reversals

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Broad asset classes posting strongest gains in nearly a decade. Long-dated Treasurys led fixed income to strong gains in Q2. Mid- and large-cap Growth outpaced small-caps and Value in first half.

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

ETF Model increases equity exposure to 72%

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Both top level technical factors in the model shifted from bonds to stocks in June. Vanguard Dividend Appreciation ETF (VIG) now carries the heaviest weighting in the fund at 22%.

Ned Davis Research | ETF Selection | Model Update | Monthly

Record Inflows to Fixed Income ETFs

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$26.5 billion inflows to fixed income ETFs in June. Gold closed the week at a five-year high. Pacific ex-Japan and Australia made new all-time highs on a total return basis.

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

Manufacturing activity slows further

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Weaker ISM factory activity weighs on the outlook for both growth and inflation. Construction spending falls.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Manufacturing activity slows further

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Weaker ISM factory activity weighs on the outlook for both growth and inflation. Construction spending falls.

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

Don't fight the tape or the Fed

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The tape is currently leaning bullish. The Fed also leans bullish. Not fighting either, one can hypothetically do better with less risk.

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

Mixed consumer and manufacturing data

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Constructive consumer spending and sentiment data support Q2 real GDP growth outlook. But the slump in regional factory activity weighs on the manufacturing outlook. Amid mixed reports, the odds of recession are still minimal.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Mixed consumer and manufacturing data

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Constructive consumer spending and sentiment data support Q2 real GDP growth outlook. But the slump in regional factory activity weighs on the manufacturing outlook. Amid mixed reports, the odds of recession are still minimal.

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

Externals on houses, commodities, and crude

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Home prices look stretched, but nothing like last cycle. Commodities in long-term downtrend, but oversold and cheap versus stocks. Crude oil near oversold, but upside potential likely less than earlier.

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

Q1 GDP Holds Up

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Q1 GDP unrevised at a 3.1% annual rate, but components show some weakness in final domestic demand. Pending home sales up, supporting a positive outlook for existing home sales. Consumer comfort jumps, as jobless claims continue to show tight labor market conditions.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Q1 GDP Holds Up

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Q1 GDP unrevised at a 3.1% annual rate, but components show some weakness in final domestic demand. Pending home sales up, supporting a positive outlook for existing home sales. Consumer comfort jumps, as jobless claims continue to show tight labor market conditions.

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

Rate cuts and sectors

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Consumer Staples and Health Care perform best 12 months after a first Fed rate cut. Consumer Discretionary outperforming Industrials after a first cut could be a recession warning. We recommend overweighting Consumer Discretionary and high dividend yielding bond proxy industries for now.

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

Is EM debt a win-win situation?

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We are upgrading USD-denominated EM debt to overweight from marketweight. Easier monetary policy from the Fed and other central banks takes the pressure off EM currencies. Liquidity, volatility, oil, valuations, and technicals all support EM carry trades.

Ned Davis Research | Fixed Income | Focus | Monthly

ETFs for NDR's U.S. Portfolio Strategy

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ETF correlator tool used to find funds with the best exposure to our latest U.S. portfolio strategy stock list. Invesco BuyBack Achievers ETF (PKW) holds 17 of the 40 names in the portfolio. Those 17 stocks carry a 26% weight in the fund. The ETF has a 0.97 correlation with our current portfolio over the past year.

Ned Davis Research | ETF Selection | Highlights | Weekly

The rest of the world likes Fed rate cuts too

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Although not all initial Fed rate cuts have occurred around U.S. recession, most have happened during global slowdowns. When the Fed has cut rates, the rest of the world has followed. First Fed rate cuts have typically been associated with positive economic and equity performance outside of the U.S. and a stronger dollar.

Ned Davis Research | Economics | Global Focus | Monthly

Durable goods orders decline

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The drop in durable goods orders suggests reduced capex demand and slower factory activity. Trade deficit widens, despite tariffs. Mortgage application trends imply steady-to-up housing demand.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Durable goods orders decline

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The drop in durable goods orders suggests reduced capex demand and slower factory activity. Trade deficit widens, despite tariffs. Mortgage application trends imply steady-to-up housing demand.

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

Select companies with improving growth expectations

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Significant factor changes this month; removing interest coverage, book yield, and mean reversion. Select companies based on higher free cash flow yield, shareholder yield, growth expectations and earnings revisions. Favored stocks include: Bank of America, Cisco, Boeing, Starbucks, Booking Holdings, Caterpillar, Celgene.

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

Some sentiment/valuation externals on bonds and stocks

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Bonds prices at risk from high valuations. Stocks also showing high valuation risks. High sentiment in stocks also showing risks.

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

Rate cuts and dividend stocks

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Dividend stocks enter the potential easing cycle the most attractively valued in years versus other stocks and bonds. Dividend Payers have outperformed Non-Payers one year after the first Fed rate cut. The Fastest Growers have outperformed the Highest Yielders, especially in non-recession cases.

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

Consumer confidence drops

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Sharp drop in consumer confidence and purchasing plans suggests slower consumer spending growth in 2H 2019. New home sales and prices decline. Existing home price gains moderate. Richmond manufacturing weakens.

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

Consumer confidence drops

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Sharp drop in consumer confidence and purchasing plans suggests slower consumer spending growth in 2H 2019. New home sales and prices decline. Existing home price gains moderate. Richmond manufacturing weakens.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Expect steeper curve around first rate cut

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Historical analysis shows a consistent tendency to steepen around the first Fed rate cut. Current case closest to 1995 and 1998. The FOMC should reduce its target range by 50 bp to re-center the funds rate relative to longer run expectations and inflation. All of our yield curve models now favor steepeners, except the 10-2.

Ned Davis Research | Fixed Income | Focus | Monthly

China underperforms, and tells the right story?

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Confirmation lacking as benchmarks test their highs. China relative weakness reflects concerns for trade war impact. Watch sentiment, market development, bond yields, metals, and earnings growth.

Ned Davis Research | Equities | Global Focus | Monthly

Iran, Trump, & oil

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The Iranian conflict is a good reason to not be short oil, but it is not a good reason to be long. Middle East crisis events historically provide a brief pop for oil. However, following the initial pop, fundamentals dictate oil's direction.

Ned Davis Research | Commodities | Focus | Monthly

CFNAI shows growth remains below trend

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CFNAI up in May, but growth still below trend. Texas manufacturing conditions worsen considerably in June.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

CFNAI shows growth remains below trend

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CFNAI up in May, but growth still below trend. Texas manufacturing conditions worsen considerably in June.

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

Externals help confirm long-term trends

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The 52-week mean reversion on stocks leans bullish. Externals on the dollar are mixed, but are tilted negative. Externals on gold are mixed, but are tilted positive.

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

Markit flash PMIs extend worrying declines

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Markit flash PMIs point to notably softer economic growth in Q2 than in Q1. But existing home sales rebound, as mortgage rates slide.

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

Markit flash PMIs extend worrying declines

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Markit flash PMIs point to notably softer economic growth in Q2 than in Q1. But existing home sales rebound, as mortgage rates slide.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

MTUM: Back to its roots

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Ad-hoc rebalance at the end of January turned MTUM into a min vol fund. After semi-annual June rebalance, MTUM is back to a large Tech overweight. Assets are returning to the fund as it breaks to new all-time high.

Ned Davis Research | ETF Selection | Highlights | Weekly

Very mixed employment overlook

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Manpower and employment trend index suggest solid gains. But prior employment gains revised lower and overtime weak. Average weekly earnings tilts outlook toward continuing softness.

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

Second half U.S. sectors outlook - 2019

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Low rates and decelerating earnings growth cause us to lean defensive. First Fed rate cuts favor a defensive/cyclical mix. Favor Consumer and Software industries now, but Industrials and commodity industries on a global recovery.

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

Philly Fed manufacturing activity stalls

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The Philly Fed Index, LEI, and freight activity indicators point to slower growth in Q2 and the rest of 2019. But fewer jobless claims and rising consumer comfort suggest consumer spending will remain solid.

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

Philly Fed manufacturing activity stalls

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The Philly Fed Index, LEI, and freight activity indicators point to slower growth in Q2 and the rest of 2019. But fewer jobless claims and rising consumer comfort suggest consumer spending will remain solid.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Is it time to worry about China's economy?

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China's growth has slowed as a result of the intensification of the trade war. Weakness is most evident in manufacturing and trade, but the consumer remains strong, suggesting some resiliency in the overall economy. A prolonged trade war makes China's long-term goals less attainable.

Ned Davis Research | Economics | Global Focus | Monthly

Bimodal Fed opens the door to rate cuts

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Big contingent arguing that a 50 bp reduction in the target rate would be appropriate this year. Fed could cut 25 bp in July and end the balance sheet runoff. Inflation projections slashed and inflation expectations deteriorate.

Ned Davis Research | Fixed Income | Focus | Monthly

Architecture billings remain weak

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The decline in architecture billings portends weakness for nonresidential construction spending. Mortgage application trends bode well for housing demand.

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

Architecture billings remain weak

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The decline in architecture billings portends weakness for nonresidential construction spending. Mortgage application trends bode well for housing demand.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Favor price momentum despite elevated valuations

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Price momentum has been rallying even though valuations are expensive. Complement momentum with greater interest coverage, lower debt/equity, and higher free cash flow/enterprise value. Favored Stocks Include: LVMH, Kering, Beiersdorf, Novartis, Novo Nordisk, Schneider Electric, ASML Holding, Smith & Nephew, Rio Tinto.

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

What a sentiment difference six weeks made

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Stocks and crude oil have flipped from excessive optimism to extreme pessimism. Bonds have finally gone to excessive optimism; first time since 2016. Gold finally hit extreme pessimism, supporting our bullish view.

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

Cap rate falls to record low

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Falling bond yields keep CRE relatively attractive, despite record low cap rates. CRE returns off to a good start for the year. CRE continues to deserve a place in large, diversified portfolios.

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

Housing starts off slightly

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While housing starts are off slightly, the short-term trend is up, which bodes well for home building activity. A pickup in weekly retail sales suggests consumer spending remains solid. But Empire region services activity weakens.

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

Housing starts off slightly

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While housing starts are off slightly, the short-term trend is up, which bodes well for home building activity. A pickup in weekly retail sales suggests consumer spending remains solid. But Empire region services activity weakens.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Dissecting market reactions to initial rate cuts

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The stock market has rallied after the first rate cut, on average. Where the economy is in the economic cycle has been a big driver of returns after cuts. Initial rate cuts before or early in recessions usually have not avoided drawdowns.

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

Fed to shift language not rates

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No change in the fed funds target rate. Fed to drop "patient," move to "appropriate." Yield curve steepens after first rate cut.

Ned Davis Research | Fixed Income | Focus | Monthly

Empire factory activity contracts

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Empire state manufacturing contracts, a warning sign for nationwide activity. Builder confidence pulls back, but level still consistent with a growing housing market.

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

Empire factory activity contracts

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Empire state manufacturing contracts, a warning sign for nationwide activity. Builder confidence pulls back, but level still consistent with a growing housing market.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Gold Miners Breaking Out

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Gold Miners and Russian equity funds broke to significant new highs last week. S&P 500 back to new all-time highs relative to MSCI ACWI. EAFE small-cap fund (SCZ) ended the week at a 10-year low relative to global equities.

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

Still bullish on gold - watch breakout attempt

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New highs would support bullish case for gold. Most indicators now bullish in Gold Watch report. Sentiment reversing for gold and inversely-correlating U.S. dollar.

Ned Davis Research | Equities | Global Focus | Monthly

Oil trend and Big Mo Tape

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The long-term trend in oil is upward. Crude oil is well below long-term upward trend line, and has reversion to the mean tendencies. Big Mo Tape deteriorating but still leans bullish, and cyclical trend evidence still gets bullish benefit of the doubt.

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

Key economic statistics improve

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Retail sales better, but a slip in consumer sentiment keeps the outlook subdued. Industrial production advances in May, but underlying strength remains questionable. Business inventories accumulate as sales decline.

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

Key economic statistics improve

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Retail sales better, but a slip in consumer sentiment keeps the outlook subdued. Industrial production advances in May, but underlying strength remains questionable. Business inventories accumulate as sales decline.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Upgrading U.K. relative to Japan

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We are increasing our U.K. weighting to 10% from 5%, and decreasing our Japan weighting to 15% from 20%. We remain overweight European peripheral debt. We are marketweight EM (USD) debt.

Ned Davis Research | Fixed Income | Focus | Monthly

Q1 2019 quarterly debt and savings update

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U.S. debt is still relatively high although it is improving. Net national savings is still too low. Debt service is still relatively low despite the Fed's past raising of rates. The recent pause should help.

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

CEO economic outlook continues to deteriorate

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CEO confidence drops on trade and global growth concerns. Import prices fall, partly due to the stronger U.S. dollar. Budget deficit swells.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

CEO economic outlook continues to deteriorate

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CEO confidence drops on trade and global growth concerns. Import prices fall, partly due to the stronger U.S. dollar. Budget deficit swells.

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

How NDR's Sentiment Composite got so pessimistic

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DAVIS265 got almost as pessimistic in early June as it was in late December. Indicators measure changes in sentiment, so the big drops compared to recent history drove DAVIS265's descent. The methodology has likely helped DAVIS265 identify extremes in the upwardly trending market of the last decade.

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

Downgrading global economic growth

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The global economy remains in a sustained slowdown, minus the risk of an accompanying U.S. recession. But amid growing uncertainties, the end of the global slowdown is now much more unclear. As a result, we downgrade our global growth forecast for 2019 to 3.3% from our previous estimate of 3.5%.

Ned Davis Research | Economics | Global Focus | Monthly

Consumer price inflation cools

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Muted CPI inflation should give the Fed room to cut rates later this year, if necessary. Mortgage applications soar, propelled by lower mortgage rates. But CFOs fear a recession by 2020.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Consumer price inflation cools

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Muted CPI inflation should give the Fed room to cut rates later this year, if necessary. Mortgage applications soar, propelled by lower mortgage rates. But CFOs fear a recession by 2020.

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

Closing XOP recommendation

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Closing XOP recommendation following crude oil and Energy sector downgrades earlier this week. Maintaining ASHR recommendation for now. Further A-share inclusion in major EM indexes should be a tailwind.

Ned Davis Research | ETF Selection | Highlights | Weekly

Q1 2019 quarterly asset allocation update

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Fed's Financial Accounts report suggests households, foreigners, and institutions continue to be overweight stocks while underweight cash. This supports the argument that this bull market is in the mature phase, and future stock returns may be lower. This has been offset by heavy corporate buying, which has continued to propel the market.

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

U.S. on course for slower growth in 2H 2019

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We downgrade our outlook for 2019 real GDP growth to 2.3% from 2.5% initially, due mainly to escalating trade issues, lower business confidence, and increased policy uncertainty. We downgrade our outlook for 2019 CPI inflation to 2.5% from 2.7%, which still implies a pickup in price pressures in 2H. Even so, we do not see signs of recession in the near-term.

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

Producer price inflation declines

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Weaker PPI inflation may give the Fed room to ease policy later this year. Small business optimism rises. Labor demand strengthens.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Producer price inflation declines

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Weaker PPI inflation may give the Fed room to ease policy later this year. Small business optimism rises. Labor demand strengthens.

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

Energy downgraded, Financials upgraded

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Moving 300 basis points of sector allocation from Energy to Financials. Energy downgraded to underweight. Financials upgraded to marketweight. We have higher conviction in Financials earnings estimates than Energy earnings estimates.

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

Rates, mortgages, munis and more!

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Reducing bond exposure on Mexico deal and technical factors. Upgrading MBS on valuation. Munis still make sense for investors in high tax brackets. Maintain overweight in CMBS, ABS, and TIPS.

Ned Davis Research | Fixed Income | Focus | Monthly

Employment trends still strong

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Employment trends index up, suggests hiring will remain robust near-term. Record low number of unemployed per job opening reflects very tight labor market conditions.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Oil: Live to fight another day

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We are downgrading our oil outlook from bullish to neutral. Recent inventory reports have been historically weak. If demand is weakening, no amount of bullish supply factors can save oil.

Ned Davis Research | Commodities | Focus | Monthly

Employment trends still strong

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Employment trends index up, suggests hiring will remain robust near-term. Record low number of unemployed per job opening reflects very tight labor market conditions.

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

Investors flock to bond funds

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Bond funds took in a record $12 billion last week. Majority of the money went to short and intermediate-term Treasury funds. Strong performance from Swiss, Russian, and Australian equities. China and Japan breaking to new lows relative to global equities.

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

Secular trend perspectives on major asset classes

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Dollar and stocks look extended on a long-term basis, although stocks may currently be short-term oversold. Bonds and homes are also stretched. Gold and commodities have worked off some extremes.

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

No net jobs growth!

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Business uncertainty and tight labor markets led to slower jobs growth in May. Aggregate payrolls still support a steady outlook for income and spending growth. Fed rate cuts on the table this summer.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

No net jobs growth!

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Business uncertainty and tight labor markets led to slower jobs growth in May. Aggregate payrolls still support a steady outlook for income and spending growth. Fed rate cuts on the table this summer.

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

Is the drop in inflation transitory or not?

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Core PCE inflation and unit labor costs weaken. Heavy debt load is a deflationary weight. But the Fed has argued that the recent drop is transitory.

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

2nd Half Credit Outlook

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We remain marketweight credit and are neutral on high yield versus investment grade. We favor the middle of the credit spectrum. Overall, the data is mixed with uncompelling valuations, slowing but positive growth, and mixed technicals. Although we remain concerned longer-term about the deterioration in credit quality, we are not worried about it today.

Ned Davis Research | Fixed Income | Focus | Monthly

Monthly Sector Update - June 2019

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Investors and our sector model shifted defensive in May.

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

Nonfarm productivity and ULC revised down

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Slower unit labor cost growth suggests no pressure on core inflation. Both exports and imports decline in April. Tariffs create uncertainty for future trade flows. Consumer comfort up, as labor market remains strong.

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

Nonfarm productivity and ULC revised down

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Slower unit labor cost growth suggests no pressure on core inflation. Both exports and imports decline in April. Tariffs create uncertainty for future trade flows. Consumer comfort up, as labor market remains strong.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Second Half U.S. Equity Outlook

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We enter the second half with a neutral outlook on U.S. equities. The trade wars' impact on the economy and EPS is the most likely determinant of whether our next move is to upgrade or downgrade. Extreme pessimism readings suggest much of the bad news has been priced in, absent a recession.

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

ISM services activity holds up

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ISM non-manufacturing index up in May, but trend decisively suggests decelerating growth. ADP payrolls weakest since March 2010, amid mounting trade pressures and recruiting difficulties. Light vehicle sales rebound, but trend range-bound.

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

ISM services activity holds up

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ISM non-manufacturing index up in May, but trend decisively suggests decelerating growth. ADP payrolls weakest since March 2010, amid mounting trade pressures and recruiting difficulties. Light vehicle sales rebound, but trend range-bound.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Sector sentiment largely confirms sector trends

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Health care is somewhat overweight. Consumer staples is underweight. Energy stocks are underweight.

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

Tariffs increasingly make less sense

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Tariffs on imports from Mexico will disrupt supply chains, with potential loss of output and employment, and increased upward pressure on inflation. The most impacted industries are vehicles, electronics, machinery, oil and gas, and agriculture. The tariff impact varies by state, with border states (TX, CA, AZ, NM) particularly vulnerable.

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

Factory orders decline

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Weaker factory orders reflect the deceleration in manufacturing, exacerbated by trade tensions. The drop in NYC services activity suggests a weaker ISM Non-Manufacturing Index tomorrow. Weekly retail sales grow below trend.

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

Factory orders decline

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Weaker factory orders reflect the deceleration in manufacturing, exacerbated by trade tensions. The drop in NYC services activity suggests a weaker ISM Non-Manufacturing Index tomorrow. Weekly retail sales grow below trend.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Trade war eliminates global green shoots

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Global manufacturing has taken a turn for the worse as trade tensions reignite. With the bottom now unclear, the prospect of a global economic recovery in the second half of the year has diminished. Developed markets saw broad-based deterioration, while emerging markets were mixed.

Ned Davis Research | Economics | Global Focus | Monthly

ETF Model slashes equity exposure

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Trend deterioration pushes model to cut equity allocation from 72% to 42%. Macro indicators are positive on stocks for now, but could flip to bonds if trade tensions persist. Investment grade corporates (LQD) and Long-Term Treasurys (TLT) are now the two heaviest weighted funds in the model.

Ned Davis Research | ETF Selection | Model Update | Monthly

Increasing Bond Exposure

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We are increasing our bond exposure by 10% to 110% of benchmark duration. Rising political and economic uncertainty putting downward pressure on yields. Further erosion in economic conditions could result in a "material" change in the Fed's outlook.

Ned Davis Research | Fixed Income | Focus | Monthly

ISM manufacturing activity moderates further

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Softer factory activity weighs on Q2 growth outlook. Private construction spending slumps, a sign of weaker capex and home building activity in Q2.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

ISM manufacturing activity moderates further

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Softer factory activity weighs on Q2 growth outlook. Private construction spending slumps, a sign of weaker capex and home building activity in Q2.

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

De-Risking Continues

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Money rotating out of high-yielding debt and into long-term government bond funds. Last week's equity selloff wasn't across the board. Russia, India, and Greek ETFs all rallied to significant new highs. VanEck Oil Services ETF (OIH) closed last week at levels last seen in 2003.

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

Stock market trends and the economy

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Growth stocks tend to do well when economy is slow. Defensive bond equivalents tend to follow bond market. Economically sensitive sectors weak.

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

Consumer spending remains weak amid some inflation

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Real PCE was flat in April, as inflation picked up. Consumer sentiment moderated from mid-May, but the overall level is still high. Regional factory activity was mixed, while the economic outlook by state remained positive.

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

Consumer spending remains weak amid some inflation

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Real PCE was flat in April, as inflation picked up. Consumer sentiment moderated from mid-May, but the overall level is still high. Regional factory activity was mixed, while the economic outlook by state remained positive.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Descending toward a bottom in the second half?

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Global downtrend intact, but watch for 2H bottom. U.S. recession would worsen decline and postpone recovery. Also watch bond market, monetary policy, sentiment, valuations, RO/RO and correlations.

Ned Davis Research | Equities | Global Focus | Monthly

Money keeps rolling in to bond funds

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Strongest bond inflows in nine years. Inflows were broad-based. Liquidity ratio remained relatively high. Taking short duration positions in bonds is not advised at this time.

Ned Davis Research | Fixed Income | Focus | Monthly

Economy slowing but Fed may have eased just in time

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PMI's suggest weaker growth. Dollar plus commodities also suggest weakness. But liquidity improving.

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

Will Value ever outperform again?

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Growth has been outperforming Value for 12.75 years, the longest run on record by far. The big macro factors that drive Growth vs. Value are getting close to favoring Value, but they are not there yet. Escape velocity and buybacks are two of the more critical indicators we are monitoring in our new Growth/Value Secular Watch Report. We identify factors and provide sample Value and Growth portfolios in Growth secular bull and bear regimes.

Ned Davis Research | U.S. Featured Report | Mixed

Trade war hedge

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Growing concerns that China may curb exports of rare earth elements. VanEck Rare Earth/Strategic Metals ETF (REMX) is benefiting from escalating trade tensions. Assets in REMX have surged over the last five days.

Ned Davis Research | ETF Selection | Highlights | Weekly

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