Sectors and Styles Strategy Report: May 12, 2008

Vinny Catalano, CFA — Mon, 12 May 2008 13:17:00 GMT

excerpts from this week's report: Model Growth Portfolio (MGP) “Yet another strong relative performance week for the MGP (that makes it 6 out of the last 7, 12 out of the last 14, and 14 out of 19 for the year) puts the year-to-date relative performance results at another yearly high: +2.22%...”

ETF Market Monitor Econ. Sectors & Industries: The base pattern for the current market returned to form with Energy up big and Financials down big. Accompanying Financials to the downside was its performance buddy, Consumer Discretionary. Size & Styles: What’s up with Mid Cap Growth? Unusually strong weekly performance warrants further monitoring. Global: As Energy goes, so goes Russia and Canada. Other: Commodities, Agriculture and Gold recent losers had a very strong up week.

Expected Return Valuation Model “Based on incoming data, it now appears likely that the tax rebate checks will hit most pronouncedly in 2Q08 thereby producing an economic bounce disproportionately in that quarter. Accordingly, and based on the 1Q08 earnings results (ex Financials), the projected S&P 500 operating earnings for 2008 has been adjusted upward from…”

Moving Averages Scorecard “Last week’s market pullback produced some weakening in the near term direction for most US economic sectors. There were, however, two interesting developments. Consumer Staples produced an interesting decline in its near term direction (see chart below). Contrarily, Mid Cap has improved sufficiently to warrant closer monitoring as it suggests broader market strength…”

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Sectors and Styles Strategy Report: May 5, 2008

Vinny Catalano, CFA — Mon, 05 May 2008 12:03:00 GMT

in this week’s report:

Model Growth Portfolio (MGP) “The combination of the occasional pricing discrepancy between the S&P 500 and the individual economic sectors (1.15% vs. 1.41%) coupled with the strong performance by the Latin America 40 produced an overall excellent week for the MGP. Year-to-date relative performance now sits at its highest relative performance level of the year at +172 basis points.”

Market Monitor "The Market Monitor has been expanded to include several subsets of key regions of the global market. In developed markets, United Kingdom and Canada. In emerging markets, Malaysia, China, India (deleted “Chindia”), Russia, and Mexico. This is the first step in an overall expansion of the Market Monitor that will occur over the coming weeks. Econ. Sectors & Industries: Energy dropped significantly, as did Steel. Tech and Telecom were the best performers. Size & Styles: Once again, little notable performance differences vs. the S&P 500. Global: Brazil (replacing the Latin America 40) was the big winner. Other: Commodities joined Agriculture and Gold (second week in a row) as the big losers."

Expected Return Valuation Model “A continuation of the same set of circumstances exists from a valuation perspective. The crux of the matter is whether lowering the risk adjustment band from the 120 – 140 basis points (which was done to reflect the increased level of risk due to the credit crisis) to the 100 – 120 range* is appropriate? Lowering the range will have the effect of raising the fair value target levels….”

Moving Averages Scorecard “Last week’s continuation of the recent equity market rally moved all segments upward with one positive shift to neutral ((Consumer Discretionary). That said, I believe there is general level of underlying weakness in the recent market rally as noted in a blog entry last Thursday and as can be seen in the following chart (see report)…”

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Musing on the Markets : Model Growth Portfolio

Sectors and Styles Strategy Report: May 12, 2008

Sectors and Styles Strategy Report: May 5, 2008