Recent Publications

Durable goods orders decline

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The decline in durable goods orders, led by transportation, reflects slower factory activity at the start of Q2.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Durable goods orders decline

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The decline in durable goods orders, led by transportation, reflects slower factory activity at the start of Q2.

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

Trade trends and loan demand, not much improvement

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Global trade has plunged. U.S. exports growth continues to fall. Business loan demand falls at double digit rates.

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

Cross-asset volatility is an effective indicator of credit

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We introduce our Cross-Asset Volatility Composite. Low cross-asset volatility has been good for high yield and credit outperformance, whereas high volatility has been bad. Composite should be useful for credit, carry, and leveraged-oriented traders.

Ned Davis Research | Fixed Income | Focus | Monthly

Markit flash PMIs sink

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Private sector growth nearly stalled in May. New home sales decline, but near-term trend still up. Consumer economic expectations and comfort improve, partly due to the strong labor market.

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

Markit flash PMIs sink

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Private sector growth nearly stalled in May. New home sales decline, but near-term trend still up. Consumer economic expectations and comfort improve, partly due to the strong labor market.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Downgrading EM Index, a trade war casualty

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Cutting Emerging Markets Index from overweight to marketweight. Raising weight of U.K. and Europe ex. U.K. indices from underweight to marketweight. EM downgrade due to worsened relative strength, EM currency and commodity weakness, widening credit spreads, and negative China stock influence as trade war has intensified.

Ned Davis Research | Equities | Global Focus | Monthly

Passive catches active

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Both active and passive domestic equity funds now have roughly $4.3 trillion in assets. Equity mutual fund flows are no longer a useful sentiment indicator. ETF flows since Christmas Eve are similar to recent post-correction rallies.

Ned Davis Research | ETF Selection | Highlights | Weekly

Trade war escalation hits Tech

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Trade war escalation has hit the Technology sector hardest, but weakness is not across the board. The Semiconductors & Semiconductor Equipment group has the highest revenue exposure to China and is at risk if the conflict drags on. We maintain the Technology sector at marketweight for now.

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

Recession odds remain minimal

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Economic conditions positive across more states in April, resulting in lower probability of recession. Strong rebound in freight volume bodes well for the near-term growth outlook. Architecture billings trend suggests weaker capex growth in late-2019/early-2020.

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

Recession odds remain minimal

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Economic conditions positive across more states in April, resulting in lower probability of recession. Strong rebound in freight volume bodes well for the near-term growth outlook. Architecture billings trend suggests weaker capex growth in late-2019/early-2020.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Short-term sentiment improved; long term questionable

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Short-term sentiment polls now show mild pessimism. But long-term asset allocation problems. And valuation questionable.

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

Select companies with low debt/equity

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Lower debt/equity has been outperforming and shows an elevated composite score. Complement that factor with greater interest coverage, stronger price momentum, and higher free cash flow/enterprise value. Favored Stocks Include: LVMH, Kering, L'Oreal, Novartis, Roche, Schneider Electric, ASML Holding, Smith & Nephew, Halma.

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

Small-caps' economic problem

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Small-caps' most consistent strength has been at beginning of economic expansions. The near record expansion has given large-caps a longer window. Tactically, we remain neutral (favor mid-caps), but have large-caps on watch for an upgrade.

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

What Kinds of Valuation Metrics Work in Which Sectors?

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In deciding how to sector allocate, the appropriate valuation metric to use may depend on the sector. Using P/E ratios with long trailing earnings works best for sectors with stable earnings, and P/E ratios with short trailing earnings are more appropriate for sectors with more volatile earnings. The sector allocation model described in this paper, based solely on valuation, has average excess returns of 9% over five years.

Ned Davis Research | NDR Solutions Quarterly | Quarterly

Existing home sales edge down

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Modest decline in existing home sales. Prices continue to rise amid persistent inventory shortage. Weekly retail sales grow at trend.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Existing home sales edge down

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Modest decline in existing home sales. Prices continue to rise amid persistent inventory shortage. Weekly retail sales grow at trend.

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

Who's right - the market or the Fed?

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Both could be. The market prices in a range of outcomes, whereas the Fed shows the most likely scenario. Rising trade tensions increase the probability of the Fed taking counter measures. Fed unlikely to act in the near-term due to an inflation shortfall.

Ned Davis Research | Fixed Income | Focus | Monthly

Risk-Off Week: Dollar and Bonds Rally

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iShares US Treasury Bond (GOVT) made a new all-time high last week. REIT and Min Vol funds exhibiting relative strength. South Korea (EWY) trading at a two-year low.

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

CFNAI shows economy decelerating in Q2

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The decline in the CFNAI and the Diffusion Index point to broad deceleration of economic growth.

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

CFNAI shows economy decelerating in Q2

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The decline in the CFNAI and the Diffusion Index point to broad deceleration of economic growth.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Charts are very mixed

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MSCI All Country World ex U.S and NYSE Composite look like bear markets started in January 2018. S&P 500 new high unconfirmed by DJIA. New high on Russell 1000 but just a retracement on Russell 2000.

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

Leading indicators point to slower growth

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LEI up in April, but momentum has slowed. Consumer sentiment highest since 2004. E-commerce charges on.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Leading indicators point to slower growth

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LEI up in April, but momentum has slowed. Consumer sentiment highest since 2004. E-commerce charges on.

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

Bonds send a bearish message to stocks

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Dropping bond yields consistent with falling stock prices, reflecting global economic slowdown. During year-long slowdown, bonds have outperformed stocks, and bond funds have had inflows while stock funds have had outflows. Equity risk also evident in breadth, risk-on/risk-off, sentiment, valuations, and yield curve flattening.

Ned Davis Research | Equities | Global Focus | Monthly

Some good macro indicators

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Unit labor costs low. Good for stocks and core inflation. NDR Credit Conditions Index still bullish.

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

Some pickup in housing starts and permits

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Philly Fed manufacturing up, but outlook still weak. Commercial real estate sentiment improves. Jobless claims still near record lows. Consumer comfort steady.

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

Some pickup in housing starts and permits

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Philly Fed manufacturing up, but outlook still weak. Commercial real estate sentiment improves. Jobless claims still near record lows. Consumer comfort steady.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

What multinationals are telling us

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Stocks with high overseas exposure have underperformed since May 3. The Q4 decline began with overseas stocks trailing, but quickly spread. Watch multinationals and sentiment for signs the pullback is getting worse or ending.

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

Green shoots remain, but trade war could derail recovery

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We continue to see signs of bottoming in the global economy, which point to a second half recovery. But the reassertion of the trade war presents a risk, as conditions remain fragile.

Ned Davis Research | Economics | Global Focus | Monthly

Europe holds the key for global bond yields

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German yields have been leading the way lower but should be 55 bp higher. Despite the U.S. yield advantage, German debt is favored after hedging the currency risk. European demand for U.S. bonds has waned.

Ned Davis Research | Fixed Income | Focus | Monthly

Adding Senior Loan ETF (BKLN) to satellite portfolio

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Carry trade remains a key theme for our fixed income team in 2019. Recent spread widening should be contained. Bank loans look attractive relative to high yield. Spread recently narrowed to a multi-year low.

Ned Davis Research | ETF Selection | Highlights | Weekly

Retail sales and industrial production weaken at start of Q2

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Renewed weakness in consumer spending. Industrial production falters. But builder confidence strengthens.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Retail sales and industrial production weaken at start of Q2

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Renewed weakness in consumer spending. Industrial production falters. But builder confidence strengthens.

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

Weight of valuation evidence "elevated"

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Corporations have used a lot of debt to buy stocks. Most valuation indicators show market overvalued. But buyback and free cash flow yields show undervaluation.

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

Revisiting the risks from the U.S.-China trade war

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Tariffs result in slower output and employment growth and higher consumer price inflation. Despite tariffs, goods imports from China increased in 2018, while goods exports to China declined. The trade war is putting a strain on corporate finances in the manufacturing sector, where some interest coverage ratios have declined.

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

OECD U.S. CLI points to weaker growth ahead

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But small business optimism picks up. Import price inflation weak.

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

OECD U.S. CLI points to weaker growth ahead

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But small business optimism picks up. Import price inflation weak.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Rates, spreads, and loans - How much more to go?

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Credit spreads should peak below December levels. Favor discount mortgages. Add more loans to credit portfolios.

Ned Davis Research | Fixed Income | Focus | Monthly

Health Care downgraded to marketweight

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Shifting sector allocation from Health Care to Consumer Staples and Utilities. Utilities and Staples have best breadth and trend among defensive sectors. We will likely get less defensive when NDR raises its equity allocation.

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

Crude oil: Breaking a rule

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Our Total Petroleum Inventory Model has flipped to a sell. However, the weight of all evidence - including physical market, trend evidence, and geopolitics - remains bullish for crude oil. Thus, we remain oil bulls.

Ned Davis Research | Commodities | Focus | Monthly

S&P 500 at All-Time High Relative to ACWI

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U.S. large-caps back to new highs relative to global equities. Oil Services and South Korea continue to exhibit relative weakness. ETFMG Alternative Harvest ETF (MJ) saw $156 million inflow last week.

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

Good and bad news on trend evidence

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Trading index still on oversold buy signal. Fab Five trend composite leans bullish. But net new highs lacking super strength.

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

Consumer price inflation low

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Housing affordability up.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Consumer price inflation low

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Housing affordability up.

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

Seven charts showing economic skepticism

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Economic surprises still negative. Global ISM and production continue to fall. Almost no growth in Q3 employment???

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

The trade war is not over

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The unexpected threat of new and higher tariffs on Chinese imports gave a dose of reality to investors. But even if a deal is signed, there's reason to believe that trade tensions are long from over. Global trade data has given some early signs of life, but we'd like to see more confirmation.

Ned Davis Research | Economics | Global Focus | Monthly

Sector Monthly Update - May 2019

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Cyclical sector momentum continued in April. The average beta of our recommendations has risen to nearly 1.0. NDR lifting its equity underweight would cause us to tilt cyclical.

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

Producer price inflation muted

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Trade deficit widens slightly. Wholesale inventories ease. Jobless claims edge up.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Producer price inflation muted

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Trade deficit widens slightly. Wholesale inventories ease. Jobless claims edge up.

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

U.S. weighs down the world

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U.S. now weighing down cap-weighted benchmarks with worsening relative strength outlook. Apparent peak in megacap concentration, bearish reversals in sentiment and VIX. Underperformance of China-sensitive stocks and dropping RO/RO consistent with ACWI weakness.

Ned Davis Research | Equities | Global Focus | Monthly

Is a mini inflation scare ahead?

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The inflation boom of the 1960s and 1970s is not likely to be repeated. But we could have a mini inflation scare in the coming years. Bond investors should demand a higher term premium.

Ned Davis Research | Fixed Income | Focus | Monthly

Satellite position update and a tweak to the ETF Model

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Renewed trade tensions have weighed on our high beta satellite picks. Outlooks for the U.S. dollar, oil, and credit should be a tailwind once risk appetite returns. At the end of the month, we will replace EFA with IEFA in the ETF Model.

Ned Davis Research | ETF Selection | Highlights | Weekly

April Sentiment/Valuation update

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The Value Line P/E has been useful. Market is overvalued based on P/E and versus income. Market is over believed, but public appears to be selling.

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

Can the market handle some bad news?

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The S&P 500 has had the second-longest streak without a 3% correction since the March 2009 low. Sentiment has returned to optimistic levels, leaving the market vulnerable to a pullback. A quick return to pessimism without much damage to long-term breadth would set the stage for a continuation of the rally.

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

Squaring faster wage growth with slower unit labor costs

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Wage growth has picked up across pay scales and industries, reflecting tightening labor market conditions. But faster productivity growth has kept unit labor costs and inflation low. A proxy for unit labor costs by industry, however, suggests some downward pressure for profit margins.

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

Labor Demand Strengthens

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March JOLTS report shows tightening labor market conditions. Small business optimism rebounds. Weekly retail sales mostly up.

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

Labor Demand Strengthens

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March JOLTS report shows tightening labor market conditions. Small business optimism rebounds. Weekly retail sales mostly up.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

The Term Premium Model is broken

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We can't reconcile the expected average of short-term rates used in the ACM term premium model with what we observe in the market. As a result, the term premium estimate is vastly understated. Using alternative measures of the risk neutral rate, the term premium would be closer to zero or modestly positive.

Ned Davis Research | Fixed Income | Focus | Monthly

Employment trends point to slower payrolls growth ahead

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Employment trends moderate. Light vehicle sales decline.

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

Employment trends point to slower payrolls growth ahead

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Employment trends moderate. Light vehicle sales decline.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Value Funds Join the Party

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Value funds have finally recouped their Q4 losses. Most growth funds did so a month ago. Energy Select SPDR (XLE) at 795-week low relative to global equities. Fund saw over $1 billion in outflows last week.

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

After breadth thrust, bulls get benefit of the doubt

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Breadth thrust buy update. But several market averages not at new highs. This includes Dow Industrials and Transports.

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

Super Strong Labor Markets

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Nut ISM services activity moderates.

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

Super Strong Labor Markets

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But ISM services activity moderates.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Still searching for a bottom

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The global manufacturing PMI continues to have trouble finding a bottom. Our analysis of the indicators is giving us mixed signals that an economic recovery is near. The eurozone continued to look weak, albeit less so, while the Chinese recovery remains fragile.

Ned Davis Research | Economics | Global Focus | Monthly

Fab Five monetary update

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Monetary conditions lean bullish. Both government and corporate interest rates have fallen. Economic liquidity has improved.

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

Nonfarm productivity jumps

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Factory orders rebound. Layoff trend remain low. Consumer comfort off slightly.

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

Nonfarm productivity jumps

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Factory orders rebound. Layoff trend remain low. Consumer comfort off slightly.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Five sectors confirm S&P 500's record high

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Five sectors made new record highs alongside the S&P 500 in 2019, a level that has been consistent with strong stock performance. We still need more evidence before turning fully bullish on cyclicals.

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

Is the Phillips Curve really dead?

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The Phillips curve still might work in the U.S. and Europe. This could put modest upward cyclical pressures on inflation. Structural disinflationary forces, however, remain strong.

Ned Davis Research | Fixed Income | Focus | Monthly

Worse for the dollar, better for gold

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Dollar highs lacked confirming weakness in currencies and gold. Dollar sentiment now reversing from extreme optimism while currency and gold sentiment reversing from extreme pessimism. Gold Watch report reflects improving outlook for gold.

Ned Davis Research | Equities | Global Focus | Monthly

ISM Manufacturing Index shows broad-based weakness

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Construction spending and mortgage applications decline. But ADP payrolls jump.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

ISM Manufacturing Index shows broad-based weakness

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Construction spending and mortgage applications decline. But ADP payrolls jump.

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

More on the buy-back bull market

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Public fund flows are weak. As is hedge fund and margin buying. But S&P 500 buy-backs at record high breadth.

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

G7 and BRIC outlook: Light at the end of the tunnel?

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We provide our quarterly economic update of the world's major countries and regions. Compared to our last outlook in January, economic conditions remain mixed to weak, but we're observing some green shoots. This supports our view that the global economy is in a sustained slowdown, but could be exhibiting signs of a recovery in the second half of the year.

Ned Davis Research | Economics | Global Focus | Monthly

A dynamic analysis of buybacks

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The surge in buybacks has led to a debate over where stocks would be without them. Under four hypothetical scenarios since 2010, the S&P 500 would have been lower if buybacks had been substituted for other uses of cash. Investors have preferred stocks that have held onto cash or repurchased stock over other uses of cash.

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

Consumer Confidence Rises

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Compensation costs ease slightly. Existing home prices continue to moderate. Regional activity indexes point to slower growth.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Consumer Confidence Rises

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Compensation costs ease slightly. Existing home prices continue to moderate. Regional activity indexes point to slower growth.

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

Will the Fed cut rates this week?

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The FOMC could trim the interest rate on excess reserves (IOER) by 5 bp to 2.35%. Increased dealer purchases at Treasury auctions have put upward pressure on fed funds. Fed should consider implementing a standing repo facility.

Ned Davis Research | Fixed Income | Focus | Monthly

ETF Model back to overweight equities

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Rebound in global shipping rates triggers another top level indicator to shift from bonds to stocks. Model is now calling for 72% equities and 28% bonds vs. a 60%/40% benchmark. QQQ carries the heaviest weighting in the model at 22%. Large shift in international exposure from EM to EAFE.

Ned Davis Research | ETF Selection | Model Update | Monthly

Consumer spending surges amid tame inflation

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Texas factory activity mixed.

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

Consumer spending surges amid tame inflation

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Texas factory activity mixed.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Oil: Are we worried?

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Through mid-April, gasoline inventories have fallen the most in a decade. We believe the Saudis will be slow to fill any supply gaps created by tougher Iranian oil sanctions.

Ned Davis Research | Commodities | Focus | Monthly

Fab Five trend update

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Trend evidence leans bullish. Golden cross from moving averages. Global Big Mo Tape also bullish.

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

The U.S. economy rocks a 3.2% growth rate in Q1, but...

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Trade and inventories boost real GDP growth in Q1. Consumer sentiment elevated, but momentum weakens.

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

The U.S. economy rocks a 3.2% growth rate in Q1, but...

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Trade and inventories boost real GDP growth in Q1. Consumer sentiment elevated, but momentum weakens.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Divergent Financials and a lack of confirmation

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Recent highs not confirmed by most markets and breadth indicators - broad market underperformance. Financials losing relative strength as bond yields recede, another non-confirmation. Watching estimate revision trends for Financials and other ACWI sectors.

Ned Davis Research | Equities | Global Focus | Monthly

The winter chill phase, and why it was less severe

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Fed rescued market from "winter chill". Record corporate buy-backs also helped. The uptrend is slightly stretched from a secular standpoint.

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

Everybody has a fix for high healthcare costs

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Health Care sector likely to be downgraded soon. Service companies with insurance and PBM operations are most at risk. We see Democrats as more Health Care friendly than Republicans.

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

Durable goods orders up, but y/y momentum slides

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Homeownership rate down slightly. Jobless claims rise. But consumer comfort up.

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

Durable goods orders up, but y/y momentum slides

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Homeownership rate down slightly. Jobless claims rise. But consumer comfort up.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Is Japanification coming to you?

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In the U.S. stocks have been the clear winner. But in Japan, bonds have been the better asset class more recently. Slower potential growth and lowflation makes a Japan-like outcome more probable. Long-term asset allocators may want to "stress test" their portfolios.

Ned Davis Research | Fixed Income | Focus | Monthly

State conditions deteriorate, but recession risk still low

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Business employment dynamics weaken. Trucking under pressure. Mortgage applications decline.

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

State conditions deteriorate, but recession risk still low

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Business employment dynamics weaken. Trucking under pressure. Mortgage applications decline.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

What are small-caps telling us?

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Small-caps led the last two S&P 500 corrections. They have been weak since February, but other breadth gauges are not confirming. Small-cap weakness probably reflecting secular conditions that favor large over small. We have small-caps on watch for a tactical downgrade from neutral to bearish.

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

Price reversion strategies continue to look attractive

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Reversion strategies benefitting from the market environment. Select companies based on: upside mean reversion potential, cheaper to historical book multiples, larger interest coverage, and greater expected earnings growth. Favored stocks include: Amazon, Exxon Mobil, UnitedHealth, Lockheed Martin, Booking Holdings, UPS.

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

Short-term sentiment on stocks, bonds, gold, and crude

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Stocks have too much optimism, while earlier breadth thrusts fading. Bonds have gone from extreme pessimism to close to high optimism. Gold moving toward extreme pessimism.

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

A weaker U.S. dollar will help manufacturing

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A strong U.S. dollar has curtailed manufacturing output growth and has weighed on profit margins. Manufacturing share of GDP picked up modestly in 2018, but is woefully short of its pre-recession level. But slower U.S. growth this year, a dovish Fed, and fizzling earnings repatriations suggest less upward pressure on the dollar which is ultimately positive for the manufacturing outlook.

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

New home sales rise

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Richmond Fed activity mixed. Weekly retail sales volatile.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

New home sales rise

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Richmond Fed activity mixed. Weekly retail sales volatile.

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

Farmers hurtin'

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Delinquency rates on agricultural loans have been climbing and are likely to continue to do so. Farmers are getting squeezed by low crop prices, falling land values, higher interest rates, global competition, trade uncertainties, and tariffs. Midwest community banks could be facing some rough spots. Stick with the larger, more profitable banks and farm operators.

Ned Davis Research | Fixed Income | Focus | Monthly

Homebuilders Bouncing Back

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Homebuilders closed the week at a 58-week high. Exposure to Health Care is weighing on MTUM. Flows shifting from Utilities to Financials.

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

Existing home sales retreat

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CFNAI points to below-trend growth.

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

Existing home sales retreat

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CFNAI points to below-trend growth.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

My charts from the NDR Conference

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Market was very oversold in December, along with plunging interest rates. We got breadth thrust buys in January. But valuation and household stock allocation likely limit upside.

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

Scenarios for the new earnings season

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Bullish scenario would be supported by a broad equity breakout to new highs with a breakdown in bond prices. Bearish scenario would be supported by worsening breadth, rising bond prices and other risk-off indications. Watching estimate revision and earnings beat rate trends along with trailing and forward growth rates.

Ned Davis Research | Equities | Global Focus | Monthly

Strong Retail Sales Put Near-Term Recession Fears to Rest

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Jobless claims decline. Consumer expectations up slightly. LEI and PMIs point to continued but slower growth. Philly Fed factory activity also moderates.

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

Strong Retail Sales Put Near-Term Recession Fears to Rest

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Jobless claims decline. Consumer expectations up slightly. LEI and PMIs point to continued but slower growth. Philly Fed factory activity also moderates.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Q4 2019 earnings risks by sector

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Financials' sky-high Q4 2019 growth estimates are driven by Berkshire. Health Care and Utilities 2019 estimates appear high given recent growth trends. Technology and Industrials' higher growth estimates taken as a positive.

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

Trade in Your Gold for A-Shares and E&P Stocks

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Macro indicators in the ETF Model are starting to shift from bonds to stocks, sensing an end to the global slowdown. Aggressively repositioning satellite portfolio for a 2nd half recovery.

Ned Davis Research | ETF Selection | Highlights | Weekly

Is an inflation surprise coming for the U.S?

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We see a risk of an upside surprise to inflation in the coming months. Shelter and compensation could pressure prices higher, while a series of one-offs have resulted in lower prices. An upside surprise could push 10-year yields above fair value of 2.71%.

Ned Davis Research | Fixed Income | Focus | Monthly

When will the global slowdown end?

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Several of our closely-watched global economic indicators appear to have bottomed. Our analysis of lead-times suggest that the global slowdown will end in the second half of 2019.

Ned Davis Research | Economics | Global Focus | Monthly

So-called profits recession likely priced in

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Corporate profits growth probably peaked in the fourth quarter. That leaves the bar set low for Q1 earnings results. Nevertheless, can't yet see an upturn in profits.

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

CFO Optimism Declines Further

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Trade deficit narrows. Wholesale inventories inch up. Architecture billings sink.

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

CFO Optimism Declines Further

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Trade deficit narrows. Wholesale inventories inch up. Architecture billings sink.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Finding the buyers, the corporate crowd

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The public has been a heavy seller in latest bull market. Even foreigners have been sellers as of late. But corporations have become a huge bullish crowd.

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

Seek Companies Trading at Cheaper Free Cash Flow Multiples

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Free cash flow/enterprise value has been the top stock-return driver over time. Complement that factor with greater interest coverage, stronger price momentum, and lower debt/equity. Favored Stocks Include: LVMH, Kering, L'Oreal, Novo Nordisk, Schneider Electric, SAP, ASML Holding, BHP Billiton, Anglo American.

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

Earnings preview: this isn't 2015

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Earnings estimates have been lowered sharply for Q1-Q3. Q4 remains high. Economic conditions, our earnings model, and sector earnings indicate a severe earnings recession is unlikely. Trailing and forward earnings growth are in ranges where the S&P 500 has posted solid gains historically.

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

Industrial Production Falters

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But builder confidence up slightly. Weekly retail sales strengthen. Empire services activity near steady.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Industrial Production Falters

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But builder confidence up slightly. Weekly retail sales strengthen. Empire services activity near steady.

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

QT to end in Q4

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Combined central bank balance sheets will start growing again in Q4. Fed to phase out Treasury shrinkage. Global liquidity growth should start to bottom.

Ned Davis Research | Fixed Income | Focus | Monthly

Energy sector turning point?

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The CVX-APC merger marks a key turning point for E&P equities. Investors will continue to reward E&P stocks with high shareholder yield and large share buybacks.

Ned Davis Research | Commodities | Focus | Monthly

SPY Back to New Highs on a Total Return Basis

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SPY and other popular large-cap funds closed last week at new all-time highs on a total return basis. ACWI Total Return at a 63-week high, 2.6% below January 2018 high. Investors taking on more interest rate risk, with money shifting from SHY to GOVT.

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

Empire State Factory Activity Modestly Up

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Current conditions in the region improve, but outlook plunges.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Empire State Factory Activity Modestly Up

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Current conditions in the region improve, but outlook plunges.

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

Record When the First Three Months Are Up

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The market started the year up each of the first three months. In the prior 22 times this happened, the market was higher 20 times the next nine months. Yet, the results may not be as good as they sound.

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

Adding to Pacific Exposure but not to Japan - Now Underweight

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Reducing Japan Index allocation from marketweight to underweight. Increasing Pacific ex. Japan Index exposure from marketweight to overweight. Adding to Emerging Markets Index overweight.

Ned Davis Research | Equities | Global Focus | Monthly

Import Price Inflation Tame

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Consumer sentiment pulls back. Housing affordability up.

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

Import Price Inflation Tame

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Consumer sentiment pulls back. Housing affordability up.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Are ETFs the Best Way to Profit from Millennials?

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MILN and GENY invest in companies that should benefit from the changing spending habits of the largest generation in history. Funds come to slightly different conclusion than NDR as to best positioned companies, but there is some overlap.

Ned Davis Research | ETF Selection | Highlights | Weekly

Does Debt Matter? A Two-Sided Argument

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Government debt service not that high. Especially after inflation. Yet compound interest will hurt over time.

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

More Evidence of Green Shoots

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Global economic indicators suggest that the slowdown remains intact. But several are showing signs of bottoming, suggesting that the worst may be behind us. Even so, we wouldn't get too complacent, as risks persist.

Ned Davis Research | Economics | Global Focus | Monthly

Corporate Bond Liquidity: "It's Bad"

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Post-crisis regulations have led to significant declines in dealer inventories. Non-government trading volumes by dealers have been lower, as electronic trading platforms slowly take market share. The loss of market share has weighed on bank trading revenue, contributing to equity underperformance.

Ned Davis Research | Fixed Income | Focus | Monthly

Interest Rates and Stocks: It's Complicated

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Deflation fears and sluggish growth have flipped the correlation between stock prices and bond yields from negative to positive. But sharp spikes in bond yields have remained bearish for stocks, and plunges in yields have remained bullish. The recent drop in bond yields is bullish for stocks, but if it persists, it would signal rising recession risks.

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

Energy Drives Producer Prices Up

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Jobless claims continue to slide. Consumer comfort up.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Energy Drives Producer Prices Up

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Jobless claims continue to slide. Consumer comfort up.

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

Crowd at Extremes, 1.1% Right, 98.9% Wrong

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Market driven by crowd psychology. But at extremes, it pays to be wary and even contrary to the crowd.

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

Millennials With Money - Profiting from consumers in their 30s and 40s

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In this demographics report we look at expected shifts in spending for millennials as they move from the 25-34 to 35-44 age group. Spending on new cars, recently purchased homes, food, select apparel, and entertainment are set rise meaningfully for the generation. In the first section of the report, we will lay out the demographics landscape which involves cross-currents. On the positive side is rising millennial income and strong demand for housing. On the down side is student loans, baby boomers entering retirement, and Gen-X being meaningfully smaller than the boomer population. In the second section of the report, we will dive into industries and companies that stand to benefit from rising millennial spending trends. We highlight that, even within industries that stand to benefit from demographics, there are likely winners and losers.

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

Tight Housing Markets Should Support Growth

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Housing could provide critical support for U.S. economic growth this year. Strong demand amid housing shortages should boost investment.

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

High Yield Flying at a Lower Altitude

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U.S. High Yield was the best performing bond sector in Q1. Despite the recovery, high yield remains below its peaks relative to Treasurys and investment grade corporates. We favor the middle of the credit spectrum, as lower grade credits continue to underperform amid weak inflows and uncompelling valuations. But rising liquidity and low volatility create a great environment for carry. We remain neutral on high yield and credit generally.

Ned Davis Research | Fixed Income | Global Focus | Monthly

OECD U.S. CLI Points to Below-Trend Growth

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Employment trends deteriorate. Factory orders decline.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

OECD U.S. CLI Points to Below-Trend Growth

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Employment trends deteriorate. Factory orders decline.

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

List of Funds at New All-Time Highs is Growing

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Growth, Dividend, Mid-Cap, Preferred, Tech, and Hedged EAFE funds broke to new all-time highs last week. Consumer Discretionary SPDR fund (XLY) at a new all-time high on an absolute basis and relative to global equities.

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

Putting Trend Evidence Into Long-Term Perspective

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Trend evidence leans bullish. But late in economic cycle. Also, stock market cycle stretched.

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

Why Risky to Raise Equity Exposure or Allocation to U.K. and Europe

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With optimism excessive, dangerous to increase equity allocation at current levels. With significant fundamental improvement, a correction could produce a better entry point. Evidence lacking that U.K. and Europe ex. U.K. indices will outperform.

Ned Davis Research | Equities | Global Focus | Monthly

Back to Goldilocks?

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Employment report back to trend in March. Light vehicle sales rebound strongly.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Back to Goldilocks?

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Employment report back to trend in March. Light vehicle sales rebound strongly.

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

Why I'm Pro-Savings and Investment, And Anti-Debt

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More debt and deficits may not be the way to go. $16,000 in a tax-deferred savings at an early age could compound magically to over $1 million. $300,000 in a mortgage at 5.5% could actually be over $600,000 in payments.

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

CEO Confidence Remains Depressed

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State leading indexes deteriorate. But jobless claims drop to lowest since 1969.

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

CEO Confidence Remains Depressed

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State leading indexes deteriorate. But jobless claims drop to lowest since 1969.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Are Banks a Better Bond or Stock Investment?

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Bank investors should prefer the debt (or preferred) portion of the capital structure. Banks are well capitalized but are ceding growth opportunities to nonbank financial entities. Banks may slowly find themselves becoming irrelevant as sources of capital.

Ned Davis Research | Fixed Income | Focus | Monthly

ISM Services Activity Cools Off

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ADP private payrolls growth moderates. Mortgage applications jump.

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

ISM Services Activity Cools Off

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ADP private payrolls growth moderates. Mortgage applications jump.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

What Happens to Bonds After Yield Curve Inversions and Surrounding Characteristics

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Bond market performance has been mixed following yield curve inversions. The current inversion has some unusual financial characteristics but fairly normal economic characteristics.

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

March 2019 Sentiment/Valuation Update

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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

Durable Goods Orders Decline

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NYC services activity up, but outlook sinks. Weekly retail sales soft.

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

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