Recent Publications

Industrial Production Up Modestly

|

Freight activity moderates slightly. Regional activity mixed.

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

Buy Cheap Emerging Markets? Not Now

|

MSCI Emerging Markets Index valuations have been improving in both absolute terms and relative to other regional indices. Signs of earnings pessimism support the prospects for positive surprises. But it's too early to buy -- more weakness likely in continuing global downtrend.

Ned Davis Research | Equities | Global Focus | Monthly

When Good Macro Turns - Bad For Stocks

|

In some ways the economy is booming with higher employment and higher wages. That can put upward pressure on inflation and interest rates hurting stocks. Even booming earnings can cause stocks to struggle.

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

Feeling Grinchy Again

|

We expect S&P 500 Retailing to underperform in December. We see holiday growth estimates as too optimistic given lower sentiment this year. We are already seeing slower growth from brick-and-mortar retailers.

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

Retail Sales Start Q4 Strong

|

Business inventories in line with sales. Import price inflation remains in check. Regional factory activity mixed. Two gauges of business and consumer confidence decline. Jobless claims little changed.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Retail Sales Start Q4 Strong

|

Business inventories in line with sales. Import price inflation remains in check. Regional factory activity mixed. Two gauges of business and consumer confidence decline. Jobless claims little changed.

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

Bailing on Chinese Bonds

|

We no longer find Chinese bonds attractive. Spreads have narrowed and real yields have declined. Wait for better valuations before getting back in.

Ned Davis Research | Fixed Income | Global Comment | Weekly

Another Notch in the Global Recession Watch

|

We can now more confidently declare that the global economy has entered recession. In the context of a mild global recession, there's still more room for downside in equities.

Ned Davis Research | Economics | Global Comment | Weekly

Thanksgiving Week Seasonality

|

Thanksgiving week typically has light volume with the NYSE closed Thursday and Friday afternoon. Wednesday and Friday of Thanksgiving week have been positive about 75% of the time. Holiday cheer usually fades with weak seasonality the following Monday.

Ned Davis Research | ETF Selection | Highlights | Weekly

CPI Inflation Remains Moderate

|

Budget deficit grows, and projected to widen further. Architecture billings show some weakness. Mortgage applications decline.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

CPI Inflation Remains Moderate

|

Budget deficit grows, and projected to widen further. Architecture billings show some weakness. Mortgage applications decline.

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

Valuation Update, Confidence Update

|

Stocks overvalued based upon earnings. Consumer confidence is extremely high. Advisory service sentiment extremely optimistic. All these argue stocks got overdone on the upside.

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

The Chart to Watch Post Midterms

|

The stock market is entering the strongest period of the four-year cycle. Without Republicans in control of the House, the historical message is weaker. Watch the NDR Real Monetary and Fiscal Policy Index to determine if the government is a headwind or tailwind in 2019.

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

NFIB Small Business Optimism Still High

|

OECD U.S. CLI declines. Weekly retail sales mixed, but holiday spending forecast strong.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

NFIB Small Business Optimism Still High

|

OECD U.S. CLI declines. Weekly retail sales mixed, but holiday spending forecast strong.

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

Stripping for Sentiment

|

The demand for long-term Treasurys receded after the funding deadline passed. Strips demand may tell us something about long-term sentiment.

Ned Davis Research | Fixed Income | U.S. Comment | Daily

Defensive Leadership Continues

|

Defensive leadership continues with Health Care, Dividend, and Low Volatility funds all showing relative strength. Strong inflows to both high yield (HYG, JNK) and short duration fixed income funds (BIL, SHY). No appetite for European equities. Eight straight months of outflows. Some of the flows are heading to Latin America.

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

Don't Fight The Tape Or The Fed

|

Combination indicators of the Fed and the tape are defensive for U.S. and World. The tape is overextended on the upside. The Fab Five remains on its sell signal.

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

Producer Price Inflation Strengthens

|

Consumer sentiment edges down slightly. Wholesale inventories up.

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

Producer Price Inflation Strengthens

|

Consumer sentiment edges down slightly. Wholesale inventories up.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Best Economy of All Time And Why I am Skeptical

|

Despite booming employment, there are economic flaws. A bubble in financial assets. Higher debt ratios than 2000 and 2007.

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

Not Giving Up on Gold

|

Remaining neutral on gold while recognizing trend improvement, excessive pessimism, the global equity downtrend, a questionable dollar outlook and accelerating U.S. budget deficit. Evolving global reflation theme has positive long-term implications. We will upgrade from neutral to bullish if more than half of our Gold Watch indicators return to their key levels.

Ned Davis Research | Equities | Global Focus | Monthly

Jobless Claims Still Near Multi-Decade Lows

|

Consumer comfort close to highest since 2001. But housing opportunity diminishes.

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

Jobless Claims Still Near Multi-Decade Lows

|

Consumer comfort close to highest since 2001. But housing opportunity diminishes.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Monthly Sector Update - November 2018

|

Maintain defensive position; use post-election rallies to reduce cyclical exposure. Look for post-election rallies within Materials and Industrials.

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

Treasurys, U.S. Relatively Unattractive

|

Treasurys are unattractive relative to their German and Japanese counterparts. A reduction in foreign demand could push U.S. yields higher. We remain significantly underweight the U.S. market.

Ned Davis Research | Fixed Income | Global Comment | Weekly

De-Risking our Satellite Portfolio

|

Using the recent bounce as an opportunity to de-risk our tactical portfolio. Closing US Momentum (MTUM) and Hedged Japan (DXJ) recommendations. Maintaining exposure to Health Care Providers (IHF). Waiting for green light from Rally Watch Report before increasing risk exposure. Look to some of the most beaten down areas for leadership once a bottom is established.

Ned Davis Research | ETF Selection | Highlights | Weekly

Net Job Creation Continues

|

Mortgage applications slide. Used vehicle prices rise.

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

Net Job Creation Continues

|

Mortgage applications slide. Used vehicle prices rise.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

"Most Hated" Bull Market? Indicators Suggest It's Loved

|

Despite the infamous sell-off of traditional mutual funds, the public is buying passive funds. Cash is low versus margin debt and bonds plus stocks. The S&P 500 price/sales ratio is at a record high.

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

Five Reasons to Reduce Exposure on Rallies

|

We are downgrading our intermediate-term U.S. equity outlook from bullish to neutral. Reasons include likely model deterioration, earnings slowdown, no breadth thrust, no capitulation, and limited pessimism. We discuss what to watch for next steps.

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

JOLTS: Slight Decline in Job Openings

|

But labor market remains tight.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

JOLTS: Slight Decline in Job Openings

|

But labor market remains tight.

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

Credit Barbell Bending But Hasn't Broken

|

Credit had its worst performance in months. Nevertheless, we continue to overweight credit and favor high yield over investment grade. Stay with the credit barbell. Violations of key levels would likely alter our credit recommendations.

Ned Davis Research | Fixed Income | U.S. Focus | Monthly

ISM Services Activity Moderates Slightly

|

State leading indexes point to softer growth. Employment trends bounce back up.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

ISM Services Activity Moderates Slightly

|

State leading indexes point to softer growth. Employment trends bounce back up.

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

Oil: Signs of a Bottom

|

Oil's correction has created the seasonal, sentiment, and technical preconditions for a solid bottom. However, fundamental data remains choppy. For now, we remain officially neutral on crude oil, but will upgrade if our inventory models strengthen.

Ned Davis Research | Commodities | Focus | Monthly

Bond Funds Make Fresh 2018 Lows

|

Several of the largest fixed income ETFs broke to 20- month lows last week. Largest corporate bond ETF (LQD) now down 5.3% for the year. Equipment and Services fund (XES) at an all-time low relative to global equities. Risk-off tone continues with flows into short-term bond fund (BIL) and out of Senior Loan fund (BKLN).

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

Global Economic Conditions Worsen to New Lows

|

Global manufacturing grew at its slowest pace in two years, with leading indicators suggesting that conditions will worsen in the coming months. Although the global aggregate and our overall PMI breadth measure remain above recessionary levels, some component indexes are already giving bearish signals. Developed markets continued to outperform emerging market PMIs, but both aggregates peaked almost a year ago, suggesting limited decoupling.

Ned Davis Research | Economics | Global Comment | Weekly

The Global Bear Market Except Brazil

|

Global Big Mo Tape is defensive. Emerging markets in dollar terms have collapsed. Most global markets are in downtrends.

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

Employment Rolls On, Wages Rise

|

The widespread strength in the October Employment Report will keep the Fed on its normalization path. We continue to expect the Fed to raise rates by 25 bp again in December and twice more in 2019.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Employment Rolls On, Wages Rise

|

The widespread strength in the October Employment Report will keep the Fed on its normalization path. We continue to expect the Fed to raise rates by 25 bp again in December and twice more in 2019.

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

Why a Strong Secular Tailwind Bodes Well for the Communication Services Sector

|

Over the next decade, the 35-44 and 65+ age cohorts are set to swell. An obsession by millennials with their mobile devices, an increase in leisure time, and the love of TV by baby boomers, mean that companies in the new Communication Services sector are set to benefit from a strong secular tailwind.

Ned Davis Research | NDR Solutions Quarterly | Quarterly

The Fed Must Address Asset-Inflation Bubble- "But It's In a Box"

|

Consumer price inflation is only a minor problem. But the Fed must address asset-inflation bubble before it creates financial instability. However, the Fed has put itself "in a box" by maintaining zero-percent interest rates for many years.

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

Cutting Equity Allocation to Underweight

|

Shifting 5% from stocks to bonds, now underweight equities, overweight bonds, marketweight cash. Responding to Global Balanced Account Model and Bear Watch indicators. Signs of bottom lacking, with more indicator similarities to past bear markets.

Ned Davis Research | Equities | Global Focus | Monthly

ISM Factory Activity Moderates

|

Nonfarm productivity still subdued. Construction spending flat. Layoffs data mixed. Consumer comfort little changed.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

ISM Factory Activity Moderates

|

Nonfarm productivity still subdued. Construction spending flat. Layoffs data mixed. Consumer comfort little changed.

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

Reconsidering Post-Midterm Sector Positioning

|

We remain overweight defensive sectors and may not get completely cyclical after midterm elections, despite favorable seasonality for cyclical sectors. Our study shows our defensive SHUT Index tends to outperform 12 months after significant earnings growth rate peaks. The S&P 500 is set to reach a major earnings growth rate peak in Q4 2018.

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

How High Could Bond Yields Rise?

|

Using five different approaches, yields could rise as high as 4.25% next year. Our preferred models suggest a more modest increase to 3.35% to 3.60%.

Ned Davis Research | Fixed Income | U.S. Comment | Daily

ADP Private Payrolls Jump, But Online Labor Demand Sags

|

Tight labor market pushes up compensation. Regional factory activity moderates. Mortgage applications decline.

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

ADP Private Payrolls Jump, But Online Labor Demand Sags

|

Tight labor market pushes up compensation. Regional factory activity moderates. Mortgage applications decline.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

For Halloween, Here's Some Scary Sentiment/Valuation Data

|

The stock market is overvalued. Stock market values are high relative to gross domestic income. In the mutual fund universe, stocks are very overweight and cash is underweight relative to long-term norms.

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

Consumer Confidence Continues to Surge

|

Existing home price gains moderate. Homeownership rate steady. Weekly retail sales soften.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Consumer Confidence Continues to Surge

|

Existing home price gains moderate. Homeownership rate steady. Weekly retail sales soften.

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

Peak Growth Rates

|

Earnings growth rates are likely peaking. The stock market has struggled under severe EPS deceleration. Long-term trend/breadth indicators are closer to giving sell signals. We are neutralizing our longstanding overweight for Growth over Value.

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

Bonds, Credit, and the Glass Half-Full

|

Further deterioration from bonds and credit would show risk-off behavior and an erosion in fundamentals, which could lead to changes in some of our fixed income recommendations, and argue for additional equity selling.

Ned Davis Research | Fixed Income | U.S. Comment | Daily

ETF Model Turns Defensive

|

ETF Model calling for 28% equities, 60% bonds, 12% cash. Equity allocation hasn't been this low since June 2016. Short-Term Treasurys (SHY) receiving the heaviest weighting in the model.

Ned Davis Research | ETF Selection | Model Update | Monthly

Nowhere to Hide

|

Risk-Off theme continued with dollar breaking out and defensive sectors exhibiting relative strength. Equity funds of all Cap/Style/Sector/Region broke to significant new lows last week. Oil Services ETF (OIH) closed last week at a 502-week low. Utilities sector relative breadth at levels consistent with the end of the last two cyclical bears.

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

Personal Income and Spending Up

|

Texas factory activity solid.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Personal Income and Spending Up

|

Texas factory activity solid.

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

Tape: Defensive Sectors Improving, Economic Situation Weaker

|

Healthcare looks strong and the defensive sectors are improving. However, financials are a problem and the economic sectors are weak. Investors are defensive on cap leadership; Fed policy bites housing and autos.

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

Q3 GDP Strong Amid Solid Consumer Spending But Soft Capex

|

Consumer sentiment off slightly.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Q3 GDP Strong Amid Solid Consumer Spending But Soft Capex

|

Consumer sentiment off slightly.

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

About Those Twin Deficits: Budget and Trade

|

Interest service costs soar on Government debt. Spending on defense and social security is in uptrend. We have a record-high trade deficit with China.

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

Global Breakdown, Broadening Bear Market

|

Global downtrend more decisive, with increased U.S. participation. Downgrading the U.S. from overweight, upgrading the U.K. from underweight, now marketweight on all regional indices. Watching Bear Watch, Global Balanced Account Model, bond yields, VIX, defensive sectors, the Tech sector, and Risk-on/Risk-Off Ratio.

Ned Davis Research | Equities | Global Focus | Monthly

Durable Goods Orders Up, Led by Defense

|

Fewer states expand in September, but recession odds still low. Goods trade deficit widens to a record. Pending home sales still weak. Jobless claims remain low. Consumer comfort pulls back slightly. K.C. Fed activity weakens.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Durable Goods Orders Up, Led by Defense

|

Fewer states expand in September, but recession odds still low. Goods trade deficit widens to a record. Pending home sales still weak. Jobless claims remain low. Consumer comfort pulls back slightly. K.C. Fed activity weakens.

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

Homebuilding Despair

|

Homebuilding valuations have fallen from the extreme levels seen earlier this year. We will need to see improving new home sales before getting bullish. Demographic trends are favorable for homebuilders longer-term.

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

Encouraging Signs in EM Debt

|

On an absolute basis, we don't find EM debt particularly compelling. Nevertheless, the downside momentum appears to be broken, and relative performance has improved. We remain neutral.

Ned Davis Research | Fixed Income | Global Focus | Monthly

G7 and BRIC Outlook: Warning Signs Ahead?

|

We provide our quarterly economic update of the world's major countries and regions. Compared to our last outlook in July, economic conditions have either worsened or remained stable among most of the world's largest economies amid rising global risks. This supports our view that global economic momentum peaked at the end of 2017. Inflation pressures have picked up modestly among most countries. As a result, global monetary policy will continue to move toward gradual normalization.

Ned Davis Research | Economics | Global Focus | Monthly

Buy the Dip? Not so Fast!

|

S&P 500 traded lower in 13 of last 15 trading sessions. History points to below average returns over the next month. Watching for breadth thrust to signal the bulls are back in control.

Ned Davis Research | ETF Selection | Highlights | Weekly

Markit PMIs Show Stronger Private Sector Activity

|

But new home sales continue to decline. Architecture billings moderate. Existing home price gains diminish.

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

Markit PMIs Show Stronger Private Sector Activity

|

But new home sales continue to decline. Architecture billings moderate. Existing home price gains diminish.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Temporarily Neutralizing Price Momentum Exposure

|

Weakening breadth and elevated valuations creating near-term headwinds for price momentum. Select Companies with the Following Factor Exposures: Standardized Unexpected EPS, Asset Turnover, Free Cash Flow/Enterprise Value, Interest Coverage, Earnings Revisions. Stocks Demonstrating These Characteristics Include: Booking Holdings, Lowes, Anthem, Boeing, Raytheon, Apple, Nvidia, Adobe.

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

Sentiment/Valuation: The Good, Bad, and Ugly

|

Buybacks are at a record high; that's good. Intermediate-term sentiment is still fairly high; that's bad. Households are fairly full invested; that's ugly, looking 10 years ahead.

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

Richmond Fed Activity Moderates

|

Weekly retail sales soft.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Richmond Fed Activity Moderates

|

Weekly retail sales soft.

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

Downside Risk Perspectives

|

Models are the main drivers of our outlook, and the U.S. Stock Market model has not broken down. Recession risks are low. U.S. cyclical bear markets not associated with recessions have had median drops of 23% over seven months. Drawdowns have been modest on average over the next three quarters of the presidential cycle.

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

Shifting from QE to QT - What it Means for Bonds

|

Net central bank purchases will turn negative in November, three months earlier than our prior projection. QT is not the mirror image of QE. Although QE would no longer be providing a tailwind for risk assets, it wouldn't be providing much of a headwind either. The trough in global yields occurred near the peak of global QE.

Ned Davis Research | Fixed Income | Global Comment | Weekly

Oil: Where Do We Stand?

|

Weak crude oil inventory reports, econ data and seasonality are at odds with stronger trend evidence, term structure, and looming Iranian sanctions. We remain tactically neutral on crude oil.

Ned Davis Research | Commodities | Focus | Monthly

Power Surge: Utilities at All-Time High

|

Several Utilities funds made new all-time highs last week. Staples and Health Care funds breaking to significant new relative strength highs. Banks, Home Construction, and Autos all making compelling cases for most hated industry. Five straight weeks of outflows for JNK.

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

CFNAI Moderates Slightly

|

Equipment finance industry confidence eases.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

CFNAI Moderates Slightly

|

Equipment finance industry confidence eases.

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

Very Mixed Trend Evidence

|

Different versions of Big Mo Tape give divergent views. NYSE new lows on October 12 higher than in January/February 2018. Volume demand greater than volume supply but lots of heavy selling days.

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

Existing Home Sales Disappoint

|

Home sales decline for the sixth month in a row, amid higher mortgage rates and tight inventories.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Existing Home Sales Disappoint

|

Home sales decline for the sixth month in a row, amid higher mortgage rates and tight inventories.

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

Some Softness in Some Leading Indicators

|

Some leading economic indicators are rolling over. Question on capex and exports. Global recession? What's bad for autos and housing, bad for U.S. economy?

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

FAQs on GICS Sector Changes: The Revised Model and Other Impacts

|

We answer FAQs about the impact of GICS changes on S&P 500 sectors.

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

Reverting to Benchmark Weights as Global Demise Continues

|

As correlations rise on the downside, we are moving regional allocations toward benchmark weights. Reducing U.S. overweight and Canada allocation, while lifting Europe ex. U.K. and Emerging Markets to marketweight. Bonds, cash and gold have offered capital preservation in global bear markets.

Ned Davis Research | Equities | Global Focus | Monthly

LEI Points To Robust Growth

|

Philly Fed factory activity moderates slightly. Jobless claims decline. Consumer comfort and optimism rise.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

LEI Points To Robust Growth

|

Philly Fed factory activity moderates slightly. Jobless claims decline. Consumer comfort and optimism rise.

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

What You've Asked About the Global Recession Probability Model

|

We answer your questions about our NDR Global Recession Probability Model, which jumped into the high recession risk zone this month. We discuss the methodology of the model and what's been driving its latest move.

Ned Davis Research | Economics | Global Comment | Weekly

Is MTUM Running Out of Momentum?

|

MTUM has underperformed the S&P 500 since early June. The percentage of MTUM constituents trading above their 10-day average fell to zero last Thursday. Giving momentum trade the benefit of the doubt with breadth rebounding and positive seasonal period approaching.

Ned Davis Research | ETF Selection | Highlights | Weekly

Housing Starts Off Slightly, But Trend Holds Up

|

Mortgage applications decline.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Housing Starts Off Slightly, But Trend Holds Up

|

Mortgage applications decline.

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

Focus on Higher Quality Stocks in Europe

|

Quality and profitability strategies typically outperform after the broad market has fallen ten percent. Also, favor companies with lower downside volatility, stronger price momentum, and cheaper free cash flow multiples. European stocks with favorable characteristics include: LVMH, L'Oreal, Novo Nordisk, Essilor, Safran, SAP, Rolls-Royce, Experian, Rio Tinto.

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

How the Stock Market and Consumer Confidence Are Related

|

It's hard to tell the difference between the stock market and consumer confidence. It's also hard to tell the difference between the stock market and our short-term sentiment composite (DAVIS265). Be wary of the crowd at extremes.

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

Seven Charts to Watch Short Term. Plus, the Big Picture.

|

Watch breadth, sector leadership, sentiment, and earnings. The U.S. Stock Market Model has not deteriorated. Even if the market avoids a bear market, it could be setting up a cyclical peak in 2019.

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

Industrial Production Up

|

Builder confidence improves. JOLTS show record levels of job openings and hires. Budget deficit rises to a six year high. Empire services activity moderates. Weekly retail sales mixed.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Industrial Production Up

|

Builder confidence improves. JOLTS show record levels of job openings and hires. Budget deficit rises to a six year high. Empire services activity moderates. Weekly retail sales mixed.

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

Why Bonds Matter for Equity Valuation

|

Absolute equity metrics fail to adjust for structural change. Bonds, however, will always be relevant. I prefer using a forward-looking equity risk premium using corporate bond yields. Should equities rally into yearend and bond yields keep climbing, bonds could soon end up being better fundamental values on a go-forward basis.

Ned Davis Research | Fixed Income | U.S. Comment | Daily

Corporate Credit Market Remains Calm

|

Shorter duration corporates showing strength on an absolute and relative basis. Largest Europe and Financials ETFs closed the week at significant new lows. Home Construction, Timber, and Clean Energy continue to be relative laggards. A record $2.7 billion in outflows for the iShares Russell 1000 ETF (IWB) last week.

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

Retail Sales Growth Subsiding?

|

Business inventories rise. Empire manufacturing up slightly.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Retail Sales Growth Subsiding?

|

Business inventories rise. Empire manufacturing up slightly.

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

Did the Market Peak on 10/3/2018? If So, Expect a Defensive Turn

|

Market turns defensive after bull market peaks. Big Mo Tape is still mildly bullish. Both NYSE Composite and World ex-U.S. peaked in January.

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

Import Prices Up, Due to Petroleum

|

Consumer sentiment off slightly.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Import Prices Up, Due to Petroleum

|

Consumer sentiment off slightly.

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

Spotlight on Bottom Line and Below

|

There has been an upward bias in earnings and valuations. This could be explained by tech/internet and globalization. Indicators also show low wages, low tax rates and low interest rates. We could be near peak in most favorable factors.

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

Another Typical Rate Tantrum? Not So Far

|

Despite the recent spike in the 10-year Treasury yield, Utilities have outperformed Financials, indicating this is not like prior interest rate tantrums. We should consider the possibility that rising rates are impacting not only sector performance but credit conditions and the market.

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

Consumer Price Inflation Moderates

|

Also, Consumer Comfort posts biggest drop in 4 years. Jobless claims up slightly.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Consumer Price Inflation Moderates

|

Also, Consumer Comfort posts biggest drop in 4 years. Jobless claims up slightly.

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

More Evidence of a Global Bear Market

|

Worsening global breadth and trend deterioration, with Technology and U.S. indices taking part. Performance consistent with increased economic risk indicated by Global Recession Probability Model. Watching Bear Watch, other reports, and Global Balanced Account Model.

Ned Davis Research | Equities | Global Focus | Monthly

Is the Bond Selloff Overdone?

|

Some measures suggest a short-term bottom or stability is at hand. Pessimism has increased, volatility has picked up, and the market is arguably oversold short-term.

Ned Davis Research | Fixed Income | U.S. Focus | Monthly

Why I Disagree with 2/3 of Economists

|

We disagree with most economists that the U.S. will experience an economic downturn in the next two years. We refute six prominent economic bearish arguments.

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

Global Model Points to Recession, Should we be Worried?

|

Our Global Recession Probability Model jumped into the high recession risk zone for the first time in over two years. Although the model has had a good historical track record, we'd like to see confirmation from more indicators. Large equity market corrections have exclusively occurred in or around global slowdowns.

Ned Davis Research | Economics | Global Comment | Weekly

Surviving a Bear Attack... What Bond Funds Offer the Best Protection?

|

62% of Fixed Income ETFs have negative one-year returns. Last time this many funds had year/year losses was the Taper Tantrum. High Yield, Senior Loan/Floating Rate, and Short-Duration funds have delivered positive returns since the 2016 low in the 10-year yield.

Ned Davis Research | ETF Selection | Highlights | Weekly

Producer Price Inflation Remains Moderate

|

Wholesale inventories jump. Mortgage applications slip.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Producer Price Inflation Remains Moderate

|

Wholesale inventories jump. Mortgage applications slip.

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

Changes to S&P GICS Sectors and What Sectors Are Strong at Market Peaks?

|

S&P makes changes to GICS sectors, "New" consumer discretionary slightly overweight. What sectors lead/lag at market peaks? At peaks, consumer discretionary and healthcare are strong -financials and utilities are weak.

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

After Rate Spike, Where Do the Indicators Stand?

|

Breadth has deteriorated, but models remain positive. Watch interest rates, sentiment, and long-term trend indicators for a downgrade of our positive U.S. equity outlook. We outline what to watch for small/large and Growth/Value.

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

NFIB Small Business Optimism Tapers Off Slightly

|

Also, weekly retail sales rise.

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

NFIB Small Business Optimism Tapers Off Slightly

|

Also, weekly retail sales rise.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Why Yields Rose, The Curve Steepened, and Spreads Narrowed and Where We are Headed

|

Most of the rise in the 10-year Treasury yield was due to expectations of faster growth and continued withdrawal of monetary policy accommodation. That caused an increase in real yields and the term premium, which caused the curve to steepen. The high yield spread fell to its lowest point since 2007 on better economic data.

Ned Davis Research | Fixed Income | U.S. Comment | Daily

Energy Shopping List: OFS Over E&P

|

Despite our recent oil downgrade (to neutral), we remain steadfast in our view that crude has entered a secular bull market. While we wait for the all-clear, we suggest clients make a "shopping list" of potential opportunities within the Energy Sector. OFS equities have diverged from both E&P equities and crude oil. We expect OFS equities to rally to close the gap.

Ned Davis Research | Commodities | Focus | Monthly

Bond Fund Breakdown

|

Record weekly outflow for iShares 20+ Year Treasury Bond ETF (TLT). Energy equity and Commodity funds breaking out on an absolute and relative basis. iShares MSCI Emerging Markets ETF (EEM) closed the week at a 14-year low relative to global equities.

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

Employment Trends Stay Strong

|

OECD U.S. CLI gives mixed signals.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Employment Trends Stay Strong

|

OECD U.S. CLI gives mixed signals.

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

Speculation in E-Commerce, Sector Changes, and Big Mo Tape Still Bullish

|

There's speculation in marijuana and e-commerce stocks. However, Big Mo Tape remains bullish. Big Mo Tape has been tweaked for GICS changes.

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

Labor Market Remains Tight Despite Slowdown in Jobs Growth

|

The unemployment rate is now significantly below the full employment rate, which suggests broader-based inflationary pressures. We expect the Fed to continue hiking rates in December.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Labor Market Remains Tight Despite Slowdown in Jobs Growth

|

The unemployment rate is now significantly below the full employment rate, which suggests broader-based inflationary pressures. We expect the Fed to continue hiking rates in December.

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

Serious Problem: Exploding Budget Deficits

|

Government debt and deficits are growing. Spending is high but taxes are low. Government debt service explodes.

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

Factory Orders Rebound

|

State leading indexes project broad-based growth. Jobless claims decline. Consumer comfort continues to rise. But CEO confidence slides.

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

Factory Orders Rebound

|

State leading indexes project broad-based growth. Jobless claims decline. Consumer comfort continues to rise. But CEO confidence slides.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Monthly Sector Update - October 2018

|

Looking to get more cyclical as we near elections. Communication Services initiated at marketweight but could soon move underweight.

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

Reasons for Caution on the U.S. Dollar

|

Insufficient evidence that recent U.S. Dollar Index strength is part of a long-term advance. Cautious view supported by long-term technicals, sentiment and valuation, cyclical and seasonal influences, correlations with differentials and commodities, U.S. trade and budget deficits, and U.S. Treasury selling. More favorable long-term outlook for euro and yen.

Ned Davis Research | Equities | Global Focus | Monthly

The Bond Bear Has Finally Arrived!

|

Reducing bond exposure by 5% to 85% of benchmark duration. Move could be short-lived if German yields don't confirm.

Ned Davis Research | Fixed Income | U.S. Focus | Monthly

Strong Growth in ISM Services

|

ADP private payrolls jump. Online labor demand rises. Light vehicle sales rebound. Higher rates weigh on mortgage demand.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Strong Growth in ISM Services

|

ADP private payrolls jump. Online labor demand rises. Light vehicle sales rebound. Higher rates weigh on mortgage demand.

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

September 2018 Sentiment/Valuation Update

|

Short-term sentiment is surprisingly skeptical-a contrary plus. Price/sales and price/book overvalued, and stocks are high vs. gross domestic income. Cyclical sentiment/valuation shows high risk even vs. linear regression trendlines.

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

NYC Services Activity Remains Robust

|

Also, weekly retail sales jump.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

NYC Services Activity Remains Robust

|

Also, weekly retail sales jump.

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

Introducing the Bond Fund Flows Summary Report

|

The report provides a table of the different types of analysis by bond sector with hyperlinks to corresponding charts. Flows have been positive but subdued in the past few months. Liquidity ratios remain in neutral territory.

Ned Davis Research | Fixed Income | U.S. Comment | Daily

Slump in Trade Clouds Global Outlook

|

Global manufacturing growth slowed to a 22-month low as global export demand slumped for the first time in over two years. Even so, most counties continue to show growing industries, suggesting that the global expansion remains intact for now.

Ned Davis Research | Economics | Global Comment | Weekly

Q3 Benchmark Review: U.S. Equities Vs (Nearly) Everything Else

|

The S&P 500 posted its biggest gain since Q4 2013, in defiance of the four-year cycle. U.S. equities continued to outperform other regions and asset classes. Growth styles and sectors were winners again in Q3.

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

End of Month Weakness Triggers Slight Drop in ETF Model Equity Allocation

|

Model drops equity allocation from 86% to 72%. Indicator based on global market breadth ended the month just below 50% bullish threshold. Intra-equity allocation continues to avoid international funds. Intra-bond allocation shifted towards emerging markets and junk bonds.

Ned Davis Research | ETF Selection | Model Update | Monthly

ISM Manufacturing Still Pointing to Strong Growth

|

Also, construction spending edges up, led by private sector.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

ISM Manufacturing Still Pointing to Strong Growth

|

Also, construction spending edges up, led by private sector.

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

Energy-Related Funds are Catching Fire

|

E&P and commodity funds are benefiting from reflationary revival. Biotech funds are breaking out. India's recent struggles continued last week. Inflows into new Communications sector funds. Assets are flowing out of bank funds as they continue to underperform on a relative basis.

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

Three Bullish Charts and Two Cautious Charts

|

NDR's Dow Theory bullish. Big Mo Tape leans bullish. But lots of new lows and overbought conditions.

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

Personal Income and Spending Up Amid Steady Inflation

|

Consumer sentiment eases slightly. Regional activity indexes mixed. State coincident indexes show strong and steady expansion.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Personal Income and Spending Up Amid Steady Inflation

|

Consumer sentiment eases slightly. Regional activity indexes mixed. State coincident indexes show strong and steady expansion.

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

Q&A: Do Bear Markets Happen When LEI and ISM Are Strong?

|

The worst bear markets are associated with recessions or an inverted yield curve. LEI and ISM PMI remain strong and the yield curve is positive, which has historically been good for stocks. However, while good for Main Street, these signs don't eliminate all risk or rule out a bear market.

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

Does the New Communication Services Sector Make Sense?

|

The collection of companies placed in the New Communication Services sector make business sense, but investors will likely still view them as distinct Telecom, Media, and Technology industries.

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

Three Scenarios and the Allocation Impact

|

With downside capitulation by U.S., downgrade to underweight likely. With global broadening on upside, upgrade to overweight likely. With more late-cycle rotation, no change from marketweight likely.

Ned Davis Research | Equities | Global Focus | Monthly

Get Your Free Publication