Market Perspectives

The Bear Case: Before And After

While our gut instincts and quantitative disciplines aren’t always in agreement, that conflict doesn’t exist today. The evidence comes down decisively in the “bear market” camp.

What's Next For The Dollar?


After suffering a two month, 7% setback from its 12-year peak in March, the U.S. Dollar Index has recovered about half that loss. We expect continued dollar strength over the next year as monetary policies in the rest of the developed world remain even looser than in the United States.

Obituary Of The Bull Market: How this historic run might be viewed in hindsight

How will today’s bull market be viewed through the eventual clarity and objectivity of hindsight? Following are seven still frames that we think best capture the essence of this historic run.


Earnings: Less Than Meets The Eye

Earnings are abysmal -- especially among the S&P 500 companies presumed to be the torch-carriers for this cycle's profitability rebound.

Early Thoughts On The Next Bear

Earlier this year we discussed the possibility of a cyclical bear market erupting in 2015 or 2016, producing losses in the vicinity of 25-30%. Those levels straddle the median, postwar S&P 500 loss of 27.5%, but in the context of the last two decades, this does not look all that significant.

2015 Leadership: An Early Take

Economically defensive stocks outperformed for 2014 and held their grip in January 2015. This action is consistent with our view that the bull market is an aged, overvalued one that has begun a final "distribution" process.

Can The Dollar Save Small Caps?

Historically, Small Caps have, on average, outperformed Large Caps during periods of sustained U.S. dollar strength. However, that isn't happening in the current cycle, and the late 1990s also stand out as a costly counter-example.

Small Cap Leverage: A Concern?

Small Cap Leverage: A Concern? Many reasons have been proposed to account for the recent momentum breakdown. we throw in yet another idea as food for thought: the leverage of companies’ balance sheets.

Why We Think "Tapering" Is Tightening

While Fed watchers continue to debate the timing of the first post-2008 Federal Funds rate hike (first or second quarter of 2015?), we believe the first move toward tighter policy occurred in January of this year, when the Fed first reduced its monthly bond purchases down to $75 billion (a $10 billion reduction). Our opinion isn’t based on any intricate knowledge of Fed liquidity flows, but simply on the subsequent action of two key stock market segments.

Market Internals—Breadth Weakness Troubling But Not Dire

Last month we argued “stock market participation is too broad for an imminent cyclical top to form,” and we’re not retreating from that statement. But interim market tops of varying degrees of importance can form with little or no warning, and we think the July 24th S&P 500 high will go into the books as either a short or intermediate-term top of some significance.


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