Recent Publications

Six Months from the S&P 500 All-Time High

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Investors finally returning, with the largest weekly flows into U.S. equity ETFs since the market peaked. Decline of at least 15% followed by a rally of 15% in such a short period of time is rare, but not unprecedented.

Ned Davis Research | ETF Selection | Highlights | Weekly

Choose Companies with Lower Leverage

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Replacing smaller semivariance with lower debt/equity. Select companies with greater interest coverage, stronger price momentum, and cheaper free cash flow multiples. Favored Stocks Include: LVMH, L'Oreal, Roche, Novo Nordisk, Schneider Electric, SAP, BHP Billiton, Anglo American.

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

Sentiment Suggests Risks Are Fairly High, Longer Term and Shorter Term

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Consumer confidence extremely high. Value Line P/E now mildly overvalued. Crowd sentiment poll hits a level consistent with high short-term optimism.

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

How Powell's Dovish Pivot Impacts Dividend Stocks

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A friendly Fed means that dividend stocks should remain an attractive alternative to bonds. Versus the rest of the stock market, Dividend Payers' attractive valuations offset their low betas. Within the dividend universe, most macro factors favor the Fastest Growers over the Highest Yielders.

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

Oil Shopping List: Buy Russia

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Coming out of this week's OPEC Committee meeting, the big discussion was growing tension between Saudi Arabia and Russia. While KSA is desperate for higher oil, Russia's fiscal constraint has placed it on solid ground. Russian equities offer a compelling way to play the oil rally.

Ned Davis Research | Commodities | Focus | Monthly

Why the Tightening Cycle Might Not Be Over

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Although the market is not expecting any rate hikes this year, we doubt that a majority of FOMC participants will agree. A reasonable case can be made for the resumption of policy normalization later in the year. The Fed has never ended a tightening cycle with the real fed funds rate this low.

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

Tech & Defensive Names Breaking Out

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Tech, Low Vol, and High Dividend funds all broke out to significant new highs last week. 3rd largest bond fund, the iShares Corporate Bond ETF (LQD), broke to a new all-time high on a total return basis.

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

Builder Confidence Holds Steady

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NAHB HMI continues to stabilize after some weakness in 2018. Empire State Services Index shows modest growth.

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

Builder Confidence Holds Steady

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NAHB HMI continues to stabilize after some weakness in 2018. Empire State Services Index shows modest growth.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

The Logic of the High-Low Logic Index is Still Bullish

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NDR Combination High-Low Logic Index turned bullish 12/28/2018. The index previously turned bearish from neutral on 2/2/2018. Index shows "animal spirits."

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

Industrial Production Up Slightly

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Consumer sentiment improves. JOLTS show tight labor market. Empire manufacturing moderates.

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

Industrial Production Up Slightly

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Consumer sentiment improves. JOLTS show tight labor market. Empire manufacturing moderates.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Q4 2018 Quarterly Debt and Savings Update

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U.S. debt is still relatively high. Net national savings still relatively low. Rising interest rates probably has caused growth to slow, but rates have backed off. That can help.

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

New ETF to Play NDR's Growth over Value Call

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Direxion Russell 1000 Growth Over Value ETF (RWGV) provides 150% long exposure to Russell 1000 Growth Index and 50% short exposure to the Russell 1000 Value Index. Fund family launched similar ETFs to make relative bets on small/large, cyclical/defensive, developed/emerging, and U.S./International.

Ned Davis Research | ETF Selection | Highlights | Weekly

Upgrading Energy to Overweight

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Energy upgraded to overweight, in line with bullish oil call and model. Lowering allocation for Staples and Financials. Maintaining cyclical/defensive mix until market bottoming process is complete.

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

New Home Sales Decline

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Import price inflation held down by the strong dollar. Jobless claims up slightly. Consumer comfort pulls back.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

New Home Sales Decline

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Import price inflation held down by the strong dollar. Jobless claims up slightly. Consumer comfort pulls back.

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

Why the Credit Conditions Index is Holding Up

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At 67.0, the CCI remains fairly high, partly due to sluggish credit growth. Rates and spreads remain relatively subdued at this point in the economic cycle, likely adding to its longevity.

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

The Global Downturn is Official!

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The OECD recently identified the start of the global downturn, aligning with our original assessments. Although the economic downturn may be less severe than prior cycles, the slowdown remains intact for now, exacerbated by waning trade conditions.

Ned Davis Research | Economics | Global Comment | Weekly

Durable Goods Orders Up, But Momentum Subdued

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Producer price inflation slows further. Construction spending rebounds, led by public sector.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Durable Goods Orders Up, But Momentum Subdued

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Producer price inflation slows further. Construction spending rebounds, led by public sector.

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

Q4 2018 Quarterly Update: What Does Asset Allocation Tell Us About Long-Term Sentiment?

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Recent data from the Fed's Financial Accounts report suggests households, foreigners, and institutions are overweight stocks (though the Q4 decline lessened the overweight). This has been offset by heavy corporate buying, leaving us with a mild uptrend for the last two years. This supports the argument that this bull market is in the mature phase.

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

Back in Growth Mode

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We are shifting our tactical recommendation from neutral to favoring Growth over Value. The six reasons are the economic slowdown, earnings deceleration, friendly Fed, broad market recovery, model consistency, and secular environment.

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

CPI Inflation Moderates Further

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Small business optimism up slightly. Employment outlook edges down.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

CPI Inflation Moderates Further

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Small business optimism up slightly. Employment outlook edges down.

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

Federal Government Debt Headed Higher

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Federal debt is growing at the fastest y/y pace in nearly six years. The risk to the near-term economic growth outlook is limited, as long as demand for Treasurys remains strong. Longer-term risks are higher, as interest payments take up a growing share of GDP.

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

Increasing European Exposure as ECB Succumbs to Deteriorating Economic Outlook

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We are increasing our European exposure at the expense of Japan. Downside economic risks and technical breakdowns support move.

Ned Davis Research | Fixed Income | Global Focus | Monthly

Investors Pour into China Funds

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18 ETFs with Boeing as their largest holding as of Friday. Inflows continue for China funds following MSCI decision to include more A-shares.

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

The Wisdom and Folly of Crowds: NDR's Approach to Sentiment Analysis

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Ned Davis Research | White Paper | Monthly

Retail Sales Up Modestly

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Business inventories rise. Employment trends rebound.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Retail Sales Up Modestly

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Business inventories rise. Employment trends rebound.

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

Big Mo Tape Moderately Bullish, As Interest Rates Fall Causing Less Debt Worries

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Big Mo Tape is at 67%, a moderately bullish reading. And interest rates have fallen. Still watching debt, but may have averted a crisis.

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

Mixed Employment Report

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It argues for continued Fed patience until the underlying economic trends become clearer. Housing starts rebound strongly, but trend still subdued.

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

Mixed Employment Report

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It argues for continued Fed patience until the underlying economic trends become clearer. Housing starts rebound strongly, but trend still subdued.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

What The Bond Market May Be Looking At

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Stocks surge argues economic growth could rebound. Yet, many people think bonds giving opposite message. I think bonds looking elsewhere at inflation, the Fed, and German bunds.

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

After Secular Bull Decade, Challenges Ahead

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Secular bull market to resume once new cyclical bull market has started with global economic recovery. Inflation most probable long-term threat to secular trend. Deflation would be more imminent threat -- currently less likely, but watch economic data.

Ned Davis Research | Equities | Global Focus | Monthly

Q4 Productivity Up, But Trend Still Sluggish

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Layoffs data mixed. Consumer comfort highest since 2000.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Q4 Productivity Up, But Trend Still Sluggish

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Layoffs data mixed. Consumer comfort highest since 2000.

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

Monthly Sector Update - March 2019

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Momentum continued for Technology and Industrials in February. Even with a China trade deal, capex concerns remain.

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

How Will We Know When Leveraged Loans are a Problem?

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We introduce several new charts to help you navigate the tricky world of leveraged loans. Loans became overvalued in December but are showing stability versus high yield at this time. We would be wary of loans when loan spreads start widening relative to Libor.

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

ETFs to Play our Bullish Crude Outlook

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Equipment & Service funds have had the strongest returns year-to-date. Funds tracking the price of WTI have performed well, but could see negative roll yield eat into returns.

Ned Davis Research | ETF Selection | Highlights | Weekly

ADP Private Payroll Gains Moderate

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Trade deficit widens significantly. Budget deficit on path to hit $1.0 trillion in 2019.

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

ADP Private Payroll Gains Moderate

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Trade deficit widens significantly. Budget deficit on path to hit $1.0 trillion in 2019.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

10 Years After the Bottom in 10 Charts

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Market returns, valuations, economic conditions, and sentiment have flipped from one extreme to another. The Fed's balance sheet stands out as not dissimilar to March 2009. The 10-year anniversary does not mean that the secular bull has to be over.

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

Looking for the Buyers; Not Fund Investors, Managers, or Margin Traders

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Fund investors have been slow to embrace the uptrend. Margin buyers and hedge fund traders also slow to invest. Algos don't need much inflow on close to jump in.

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

Big Surge In ISM Services Activity

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New home sales up.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Big Surge In ISM Services Activity

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New home sales up.

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

Carry Leads the Way, Update on Fair Value

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Carry is one of our major fixed income themes for 2019. All the major carry sectors (HY, EM, IG) outperformed in February. 10-Year Treasury fair value at 2.71%.

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

Global Manufacturing Near a Standstill, but Some Positive Surprises From EMs

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The latest PMIs confirm the global economy is in a sustained slowdown, with few signs of upside in the near-term. Despite the bad news, emerging markets grew faster than developed markets for the first time since 2013, a positive for EM equities.

Ned Davis Research | Economics | Global Comment | Weekly

Medical Device & Software Funds Trending Higher

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Software and Medical Device funds are breaking to new highs with broad participation. A number of Preferred funds have recouped Q4 losses and are back to new highs on a total return basis. S&P 500 High Beta ETF (SPHB) saw its largest weekly inflow in over two years.

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

Construction Spending Declines

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Light vehicle sales continue to slide. NYC services activity moderates.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Construction Spending Declines

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Light vehicle sales continue to slide. NYC services activity moderates.

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

Upgrading Oil

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We are upgrading oil from neutral to bullish. Fundamentals, sentiment, seasonality, and technicals are all leaning bullish. Last week's inventory report was a record +20-million barrel bullish divergence from the seasonal average.

Ned Davis Research | Commodities | Focus | Monthly

McClellan, Zweig, DeGraff, Sullivan Buys, Plus, Coppock Guide and Bollinger Bands

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NDR's version of McClellan Summation Index breadth thrust buy. Follows buys from Zweig, DeGraff and Sullivan. Yet, Coppock Guide on a momentum sell signal.

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

ISM Manufacturing Moderates

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Mixed personal income and spending data amid low inflation. Consumer sentiments retreats from mid-February.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

ISM Manufacturing Moderates

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Mixed personal income and spending data amid low inflation. Consumer sentiments retreats from mid-February.

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

Stocks May Have Discounted a Global Slowdown, but Slow Growth Is Continuing

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Stocks had a "bear market" similar to others without an inverted yield curve. And without U.S. recession. But many signs economic weakness not over.

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

Real GDP Growth Moderates in Q4

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Regional factory activity mixed.

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

Real GDP Growth Moderates in Q4

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Regional factory activity mixed.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Bonds, Gold and Reasons for Caution

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While optimism has reached excessive levels, economic and earnings factors have worsened. Strength in gold and weakness in bond yields consistent with a continuing bear market. Also recognizing Bear Watch warning and retest tendency after similar rallies, we expect to remain underweight equities at least until optimism relieved and market oversold.

Ned Davis Research | Equities | Global Focus | Monthly

Bullish Supply Trends Lifting Metals & Mining

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London Metal Exchange inventories have fallen from 2018 peaks. A prolonged period of underinvestment in capex should help lift metal prices longer term. Rising correlations between metal prices and Chinese stocks suggest more China-specific risk for Metals & Mining.

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

Reducing our Reserve Buffer Estimate to $250 Billion

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The Fed will define "ample" as a reserve buffer of 25%. The depletion of reserves will likely hit the $1.25 trillion target sometime in Q3 at the current pace of reduction.

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

Is Dollar Strength Imminent?

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There is often a view that the dollar strengthens when the global economy slows. But our analysis shows that if the U.S. avoids recession, while the rest of the world's economy slows, that doesn't necessarily imply dollar strength.

Ned Davis Research | Economics | Global Comment | Weekly

Pending Home Sales Surge

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Factory orders remain weak. Advance goods trade deficit widens.

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

Pending Home Sales Surge

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Factory orders remain weak. Advance goods trade deficit widens.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

2019 Commercial Real Estate Outlook

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We expect little change in appreciation and a total return of less than 5%. We expect the Industrial sector to outperform but by a smaller margin. We would move up in quality.

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

Select Cheaper, Higher-Quality Companies

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Opportunity to buy higher quality companies at better valuations. Select companies based on: upside Mean Reversion potential, cheaper to historical Book multiples, larger Interest Coverage, and lower Earnings Volatility. Favored stocks include: Disney, PepsiCo, Walgreens, Charles Schwab, Chubb, Medtronic, Cigna, Lockheed Martin, UPS, Accenture.

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

DAVIS265 With Thrusts; Also, Industrials and Metals Sentiment Looks Oversold

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When momentum is very strong, it can trump sentiment. Industrials underweight. Metals and mining underweight.

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

Corporate Debt Is Not Going Overboard (Yet)

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Financial conditions tightened at the end of 2018. Corporate debt level is high, but so is the interest coverage ratio. We do not see systemic risk from leveraged loans at this time.

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

Big Rebound In Consumer Confidence

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Housing starts tumble, but permits hold up. Existing home prices continue to moderate. Richmond Fed activity strengthens.

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

Big Rebound In Consumer Confidence

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Housing starts tumble, but permits hold up. Existing home prices continue to moderate. Richmond Fed activity strengthens.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Good News. Fewer Companies Are Beating Estimates.

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The earnings beat rate is below its three-year average. Since 2012, the S&P 500 has risen at a faster rate when beat rates have been lower. If no U.S. recession, then lower beat rates are likely a sign of pessimism.

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

What Happens to Bonds During Fed Pauses?

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10-year yields rise about 25 bp. Credit outperforms. Yield curve and term premium steepen slightly.

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

ETF Model Increases Equity Exposure to 58%

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Stock/Bond relative strength back above one-year average for the first time since early November. Model unlikely to increase equity exposure further until global slowdown ends. Vanguard Dividend Appreciation ETF (VIG) now carries the heaviest weighting in the model.

Ned Davis Research | ETF Selection | Model Update | Monthly

CFNAI Shows Slower Growth at Start of 2019

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CFNAI declines. CRE sentiment deteriorates. Wholesale inventories jump. Texas manufacturing improves slightly.

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

CFNAI Shows Slower Growth at Start of 2019

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CFNAI declines. CRE sentiment deteriorates. Wholesale inventories jump. Texas manufacturing improves slightly.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Senior Loan Funds Back to New Highs

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A diverse list of $1B+ ETFs broke to significant new highs on a total return basis last week. Senior Loan funds have recouped Q4 losses, but flows have yet to return. Assets in Invesco Large Cap Growth ETF (PWB) increased by 1/3 last week with record $409 million inflow. Weekly outflows for a number of short duration bond funds.

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

Breadth Thrust Update, and Two Cases Similar to Current Action

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Breadth thrusts generally followed by modest declines. Current market looks a lot like 1956-1958. Also looks a lot like 1989-1991.

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

Consumers Get a Break, But Profits Likely Peaked

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Inflation has dived from 2.95% to 1.55%. Consumers get a break. But profits have likely peaked.

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

Optimism Excessive, Rally at Risk

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Optimism excessive with increasing divergence, mega-cap concentration, and long-term downtrends intact. After four of the five previous rallies like 2019 advance, ACWI dropped to new lows. Maintaining underweight allocation, recognizing the risk of more weakness ahead.

Ned Davis Research | Equities | Global Focus | Monthly

Mixed Evidence Chinese Stimulus is Working

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Using seasonal adjustments, some recent data was not as favorable as headlines suggest. But lending rose to an unprecedented level, suggesting that stimulus is starting to work.

Ned Davis Research | Economics | Global Comment | Weekly

Manufacturing In A Soft Patch

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Durable goods orders show weak momentum. Philly Fed manufacturing contracts. Existing home sales continue to decline. LEI indicates softer growth ahead.

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

Manufacturing In A Soft Patch

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Durable goods orders show weak momentum. Philly Fed manufacturing contracts. Existing home sales continue to decline. LEI indicates softer growth ahead.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Bond-Proxy Banks

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Factoring in earnings yield and rate sensitivity, Banks' dividend yield looks attractive relative to bond-proxy industries.

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

Identifying Equity Funds with the Strongest Technicals

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The advance/decline line for iShares Aerospace & Defense ETF (ITA) is back to new highs, but the ETF is still 4% below its October 2018 high. iShares Expanded Tech Software ETF (IGV) has recouped Q4 losses with 20% of its holdings trading at one-year highs.

Ned Davis Research | ETF Selection | Highlights | Weekly

Chinese Bonds Looking More Attractive

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Recent developments suggest that at least in the short run Chinese bonds look relatively better than Treasurys.

Ned Davis Research | Fixed Income | Global Comment | Weekly

Architecture Billings Jump

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Mortgage applications rise. Truck tonnage up, but trend still slow.

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

Architecture Billings Jump

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Mortgage applications rise. Truck tonnage up, but trend still slow.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Short-Term was Very Oversold, In a Longer-Term Overvalued Market

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Trading Index buy signal 12/21/2018. DAVIS265 below 10% bulls on 12/24/2018. But longer-term very overvalued market.

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

Favor Stocks with Strong Price Momentum

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Price momentum strategies have outperformed recently and exhibit favorable breadth characteristics. Also, favor companies with greater interest coverage, lower volatility, and cheaper free cash flow multiples. Favored Stocks Include: Swisscom, LVMH, Nestle, L'Oreal, Unilever, Roche Holding, Novo Nordisk, Safran, SAP, Compass Group, Diageo, Relx, BHP Billiton, Anglo American.

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

Don't Forget About Mid-Caps

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In discussion of small versus large, mid-caps are often overlooked. Our neutral tactical recommendation on small/large is an implicit overweight to mid-caps. Earnings, valuations, and sector attribution suggest mid-caps could continue to outperform.

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

Oil: Three New Pieces of Bullish Evidence

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Three new pieces of bullish evidence - Volatility buy signal, Brent leadership, and Saudi desperation - are propelling the 2019 oil rally. Despite the improving data, the overall outlook remains mixed.

Ned Davis Research | Commodities | Focus | Monthly

Builder Confidence Up

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The pickup in builder confidence bodes well for housing starts in the near-term. But freight volume continues to weaken.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Builder Confidence Up

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The pickup in builder confidence bodes well for housing starts in the near-term. But freight volume continues to weaken.

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

When You Learn How To Play The Game, They Change The Rules

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Most bottoms look like a "W". Yet, what everyone knows isn't worth knowing. Going with the Fab Five.

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

Why the Treasury/Bund Spread Could Keep Widening

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Treasury/bund spread has resumed its widening trend. Fundamentals, valuation, and technicals all support continued widening.

Ned Davis Research | Fixed Income | Global Comment | Weekly

Industrial Production Falls, Led by Vehicles

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Import price deflation accelerates. But consumer sentiment rebounds. Empire manufacturing picks up.

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

Industrial Production Falls, Led by Vehicles

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Import price deflation accelerates. But consumer sentiment rebounds. Empire manufacturing picks up.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Employment is Strong, But Many Challenges

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Employment is strong but even "employment trends" softer. Banks tightening lending standards could hurt. Vehicles weak at relatively very low interest rates.

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

Global Sector Outlook - Defensives Sooner, Cyclicals Later?

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On potential retest, watch for defensive sectors to outperform. Once bottom confirmed, cyclicals should outperform on reassertive reflation theme. Financials are cheapest and would benefit from rising bond yields on rising economic expectations.

Ned Davis Research | Equities | Global Focus | Monthly

Retail Sales Unexpectedly Sink At Yearend

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The sharp decline in retail sales drives down the forecast for Q4 real GDP growth. PPI declines on cheaper commodities. Business inventories and sales fall. Jobless claims pick up.

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

Retail Sales Unexpectedly Sink At Yearend

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The sharp decline in retail sales drives down the forecast for Q4 real GDP growth. PPI declines on cheaper commodities. Business inventories and sales fall. Jobless claims pick up.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Shifting Away From a Max Defensive Position

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Shifting less defensive based on U.S. outlook upgrade and sector model preference. Downgrading Consumer Staples to marketweight, Financials to underweight. Upgrading Technology to marketweight and Consumer Discretionary to overweight.

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

The Land of Confusion

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Risk assets and safe havens are rallying together, creating a confusing picture for fixed income. I am most worried about not having enough duration.

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

Current Economic Outlook Dour, but Seeing Some Early Signs of Life

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Global economic conditions continue to move to the downside, reaffirming our view that we're in a sustained economic downturn. But some sentiment measures have been showing early signs of life, particularly for emerging markets.

Ned Davis Research | Economics | Global Comment | Weekly

How the Current Market Compares to Five Previous Fed Reversals

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Compared to other Fed reversals, current conditions are most similar to 2015-16. The 1998 and 2011 cases have some similarities, but economic conditions differ. Economic and earnings environments differ from 1987 and 1994-95.

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

Best Downside Hedges in the Q4 Correction

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The Dow Jones Industrial Average is up 16.7% in the 51 days since the Christmas Eve low. Historically, the largest bear market rallies have a median gain of 13% over 46 days. Funds that performed well in the vQ4 correction should provide downside protection if we get a retest of the December low.

Ned Davis Research | ETF Selection | Highlights | Weekly

CPI inflation Moderates

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Cheaper energy and a stronger U.S. dollar weigh on inflation. Mortgage applications decline.

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

CPI inflation Moderates

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Cheaper energy and a stronger U.S. dollar weigh on inflation. Mortgage applications decline.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Short-Term Sentiment Got Overbought, But Intermediate-Term Measures More Mixed

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Short-term sentiment got up to a high 73% bulls. Advisory service sentiment more neutral along with Value Line P/E. But mutual fund's cash low relative to interest rates and AAII survey also at cautious levels.

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

NFIB Small Business Optimism Slides

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Also, job openings continue to exceed the number of unemployed. Housing affordability rises. But weekly retail sales show lack of strength.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

NFIB Small Business Optimism Slides

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Also, job openings continue to exceed the number of unemployed. Housing affordability rises. But weekly retail sales show lack of strength.

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

OECD U.S. CLI Slides Further Below Trend

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The decline implies slower economic growth in first few months of 2019.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

OECD U.S. CLI Slides Further Below Trend

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The decline implies slower economic growth in first few months of 2019.

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

Bears Capitulating

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Junk bond ETF (JNK) closed the week at all-time high. 4th straight month with over $3 billion in inflows to broad Emerging Markets equity funds. 2nd largest weekly outflow on record for ProShares Short S&P 500 fund (SH).

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

More Breadth Thrusts, But Long-Term Trend Stretched

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Breadth thrust by NYSE A/D data. Confirmed by NASDAQ breadth thrust buy. Yet long-term trend stretched.

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

Carry On!

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With the major central banks on hold, carry is one of our major themes for 2019. Positive yielding debt, European peripheral debt, U.S. corporate credit, and EM bonds are our preferred areas to earn carry.

Ned Davis Research | Fixed Income | Global Focus | Monthly

Within Limited Equity Allocation, Overweight Emerging Markets

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Improving emerging market environment evident in valuations, U.S. dollar deterioration, emerging market currency recovery, commodity strength, declining interest rates, China's rising weight, and the overweight allocation recommended by our Global Regional Equity Model. We are raising our EM allocation from marketweight to overweight in seven-way framework while dropping the U.K. and Europe ex. U.K. allocations from marketweight to underweight. Watch response to rising volatility and credit spreads, forward earnings growth and earnings revisions, and relative strength on another global decline.

Ned Davis Research | Equities | Global Focus | Monthly

Why I Believe the Fed Leans Bullish, But with Caveats

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Interest rates have fallen. Commodity prices have fallen. But unemployment low and monetary base contracts.

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

Monthly Sector Update - February 2019

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Defensive sectors weakened and cyclical sectors improved in our sector model. Look for us to get less defensive given the U.S. equity outlook upgrade.

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

Jobless Claims Decline

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Also, consumer comfort rebounds post government shutdown. Used vehicle values slide.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Jobless Claims Decline

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Also, consumer comfort rebounds post government shutdown. Used vehicle values slide.

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

The Weakness of Relative Strength Strategies

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Most of the top performing funds in 2019 are in the bottom quintiles of our relative strength rankings. Relative strength strategies tend to underperform in the early stages of a market rally. If December 24th proves to be the bottom for the 2018 decline, look for funds with low relative strength rankings to outperform for the next 1-2 months.

Ned Davis Research | ETF Selection | Highlights | Weekly

Vehicle Sales Decline

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Vehicle sales start 2019 with a drop. The trade deficit narrows. Manufacturing productivity up slightly.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Vehicle Sales Decline

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Vehicle sales start 2019 with a drop. The trade deficit narrows. Manufacturing productivity up slightly.

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

Don't Fight Tape and Fed, But Upside Looks Limited

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Tape plus Fed lean positive. But valuations have more risk than reward. And sentiment also shows limited upside.

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

Upgrading U.S. Equity Outlook to Neutral

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We are upgrading our U.S. equity outlook to neutral. Breadth thrusts and a friendlier Fed are the main drivers. Risks remain, including a global economic slowdown, the potential for a failed retest, and earnings revisions.

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

ISM Services Activity Continues to Moderate

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Despite the slowdown, the NMI is still consistent with above-trend growth.

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

ISM Services Activity Continues to Moderate

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Despite the slowdown, the NMI is still consistent with above-trend growth.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Credit Conditions Expected to Deteriorate

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Weaker loan demand amid some tightening of standards and terms. Our Credit Conditions Index declined to 67.7, the lowest in two years.

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

G7 and BRIC Outlook: Conditions Worsening

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We provide our quarterly economic update of the world's major countries and regions. Compared to our last outlook in October, economic conditions have worsened. This supports our view that the global economy is currently in a sustained slowdown. This suggests a pause, or even some accommodation, among the world's central banks.

Ned Davis Research | Economics | Global Focus | Monthly

Stick With Midstream Energy/MLPs

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We recommended buying a basket of midstream energy on 12/10. After a strong rally, we reiterate our buy on midstream energy. Clients should wait until we upgrade crude oil to buy into other areas of the energy sector.

Ned Davis Research | Commodities | Focus | Monthly

More Signs of Animal Spirits Returning

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REITs are responding favorably to patient Fed. Several of the largest REIT ETFs closed the week at all-time highs. iShares largest Emerging Market equity funds (IEMG, EEM) have taken in over $6 billion to start the year. Japanese equity funds continue to show relative weakness.

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

Factory Orders Decline

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A decline in factory orders reflects capex weakness. Employment trends slow. NYC services activity moderates.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Factory Orders Decline

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A decline in factory orders reflects capex weakness. Employment trends slow. NYC services activity moderates.

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

Fickle Flows Lead to Stunning Reversal in 2019

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High yield was the best performing sector in January, followed by EM. Since flows are fickle, we would like to see a bigger cash cushion to have more confidence in the sustainability of the rally in credit.

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

Fab Five Update - Bullish With New Buy Signal

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The Fab Five Composite Model is bullish, and on a new buy signal. The Trend Model is bullish. The other components of the model are neutral.

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

Global Economic Downturn Intact, With Few Countries Avoiding the Pain

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The global PMIs confirm our view that the economy is in a sustained slowdown. Forward-looking indicators point to more downside in the near-term. The downturn is broadening, with the U.S. avoiding most of the pain.

Ned Davis Research | Economics | Global Comment | Weekly

Jobs Just Keep on Coming!

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Despite the government shutdown, U.S. economy created over 300K jobs. Strong new orders and production lift ISM manufacturing.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Jobs Just Keep on Coming!

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Despite the government shutdown, U.S. economy created over 300K jobs. Strong new orders and production lift ISM manufacturing.

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

The Fed Debate - Two Legitimate Sides

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Interest rates near zero on a real basis, and assets are inflated. Good reason to tighten. Yet, debt is high and debt service is exploding. But, dollar and commodity prices say Fed tightened too much already.

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

Cyclical Downtrend Intact - What to Watch

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For sustainable advance, watch for 50-day moving average indicators to be confirmed by 200-day indicators. Otherwise expect cyclical downtrend to continue with retest of lows. New Bottom Watch report would help determine if bottoming process had started.

Ned Davis Research | Equities | Global Focus | Monthly

Fed Drops Tightening Bias, Shifts Focus to Reserve Buffer

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Neutral bias results in firmer bonds if tightening cycle over. We estimate the Fed wants a reserve buffer of $250 to $500 billion.

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

Changing To a Neutral Hedge Fund Strategy

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Fab Five just gave a buy signal. Other tape indicators have improved. Valuations and longer-term sentiment keep me cautious.

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

Is the Rebound in Industrials for Real?

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Industrials is the best performing sector since December 24 (+18.5%). A weak capex outlook keeps us cautious on the sector. A trade deal, infrastructure bill, and better global economy could reverse sentiment.

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

Steady Rise in Worker Compensation

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Also, a surge in jobless claims likely temporary. Mixed regional factory activity. New home sales jump.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Steady Rise in Worker Compensation

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Also, a surge in jobless claims likely temporary. Mixed regional factory activity. New home sales jump.

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

ADP Payrolls Show Strong Labor Market

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Broad-based private payroll gains. But pending home sales decline.

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

ADP Payrolls Show Strong Labor Market

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Broad-based private payroll gains. But pending home sales decline.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Sentiment Improved Late Last Year, But Still Likely Has Further to Go

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DAVIS265 showed only 4% bulls in December, a rare "oversold" reading. But Advisory Service Sentiment is just neutral. And earnings estimates are still high.

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

Risk-On, Risk-Off, and Factor Opportunities

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Dividend yield and net repurchase yield factors behaved as expected during the September - December decline and subsequent rebound. Small-caps could offer a better way to play a U.S. rebound than stocks with low overseas profits. High net repurchase yielders have more mean reversion potential than other factors.

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

Consumer Confidence Slides On Weaker Expectations

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Consumer expectations sink, but purchasing plans hold up. Existing home price gains continue to moderate. Weekly retail sales soft.

Ned Davis Research | Economics | Daily Economic Perspectives | Daily

Consumer Confidence Slides On Weaker Expectations

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Consumer expectations sink, but purchasing plans hold up. Existing home price gains continue to moderate. Weekly retail sales soft.

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

New Perspectives on When the Fed Will Stop Shrinking the Balance Sheet

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On Wednesday, we may see a set of characteristics describing what the Fed considers a normal balance sheet. So far, limited impact on reserve scarcity and risk premiums.

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

Sinking Business Sentiment Weighs on Capex Outlook

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Sharp decline in CEO Confidence bodes poorly for 2019 capex outlook. It suggests slower economic growth this year, but not enough indicator evidence of recession.

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

ETF Model Gradually Increasing Risk

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Equity allocation increased from 14% to 28%, following improvement in global breadth. Emerging Markets are now receiving the highest equity and bond allocations. Model increased exposure to corporate credit at the expense of Treasurys.

Ned Davis Research | ETF Selection | Model Update | Monthly

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