The Capital Growth Channel

Moving Averages: April Month-End Update

Valid until the market close on May 31, 2017

The S&P 500 closed April with a monthly marginal gain of 0.91% after a fractional loss of 0.04% in March. All three S&P 500 MAs are signaling "invested" and two of the five Ivy Portfolio ETFs — Vanguard Total Stock Market ETF (VTI) and Vanguard FTSE All-World ex-US ETF (VEU) — are signaling "invested".

The Message of the Bond Market

At the beginning of the year, most market strategists were in agreement that interest rates were going to rise in 2017. The reasons varied: some saw inflation climbing, pushing yields higher; others worried about bigger budget deficits; a few blamed the Federal Reserve, which was thought to be planning to raise short-term interest rates two or three times and shrink its balance sheet. Whatever the reason, interest rates were expected to head higher, so seeing the 10-year U.S. Treasury yield here at 2.3% is a surprise.

Schwab Market Perspective: Should Sharp Sentiment Shifts Mean a Change in Strategy?

Recent market action has all the markings of a relief rally. The French vote in favor of centrist candidate Macron took "Frexit" off the table for now; a new tax cut proposal by the Trump administration, and the decreasing likelihood of a near-term U.S. government shutdown all appeared to play a part in the sharp rise in stocks and plunge in volatility.

Damn the Deficits, Huge Tax Cuts Ahead!

Donald Trump has made good on one of his most audacious campaign promises by submitting what he describes as the biggest tax cut in U.S. History. For once, at least, this does not appear to be Trumpian braggadocio. It really may be the mother of all tax cuts.

The Rise of Fixed Income ETFs

Recent uncertainty has fueled inflows into fixed income assets, despite expected federal interest rate hikes and record-setting growth in equities. But given the “aging of America” and the fact that investors can anticipate longer retirements, we believe demand for fixed income will continue to grow.

However, well-diversified investment in individual bonds can require a great deal of money and time. This white paper discusses challenges on the horizon for fixed income investors, and why fixed income ETFs are among the fastest-growing vehicles in the marketplace.

Reflation Moderation

The “reflation trade” that began in late 2016 has lost steam. Russ discusses what comes next.

ECRI Weekly Leading Index: Lowest Since Early December

Today's release of the publicly available data from ECRI puts its Weekly Leading Index (WLI) at 143.2, down 1.0 from the previous week and the lowest since December 9th. Year-over-year the four-week moving average of the indicator is now at 7.19%, down from 7.93% the previous week. The WLI Growth indicator is now at 5.9, also down from the previous week.

Michigan Consumer Sentiment: April Final Continues Positive Trend

The University of Michigan Final Consumer Sentiment for April came in at 97.0, up fractionally from the March Final reading of 96.9. had forecast 98.0.

Chicago PMI Up in April, Highest Since January 2015

The latest Chicago Purchasing Manager's Index, or the Chicago Business Barometer, rose slightly in April to a value of 58.3 from last month's 57.7, beating the forecast. Values above 50.0 indicate expanding manufacturing activity.

Brighter Outlook for Commodities Suggests a Fresh Look at Investment Benefits and Risks

Though uncertainties remain, we have a broadly positive outlook for commodities in the next year.

US Equities: Policy Smoke or Solid Pillars?

With US equities charging to new heights, some market observers are questioning whether the market is climbing a “wall of worry” based in part on policy promises that haven’t yet been delivered.

Quarterly Letter

In this edition of the Muhlenkamp Memorandum, Ron and Jeff discuss the Small Business Optimism Index chart which is produced by the National Federation of Independent Business (NFIB). It is based on monthly surveys of its members in order to better understand the environment in which small businesses are operating.

RecessionAlert Weekly Leading Index Update

RecessionAlert has launched an alternative to ECRI's Weekly Leading Index Growth indicator (WLIg). The Weekly Leading Economic Index (WLEI) uses fifty different time series from these categories: Corporate Bond Composite, Treasury Bond Composite, Stock Market Composite, Labor Market Composite, Credit Market Composite. The latest index reading came in at 23.2, down from the previous week.

Moving Averages: Month-End Preview

Here is an advance preview of the monthly moving averages we track after the close of the last business day of the month. At this point, before the close on the last day of the month, all three S&P 500 strategies are signaling "invested" — unchanged from last month's triple "invested" signal. Three of the five Ivy Portfolio ETFs — Vanguard Total Stock Market ETF (VTI), Vanguard FTSE All-World ex-US ETF (VEU), and PowerShares DB (DBC) — are signaling "invested", unchanged from last month's triple "invested" signal.

Finding Dividend Opportunities as the Profit Cycle Ages

A high-conviction, bottom-up approach to finding sustainable profit margins.