In this edition, Lori discusses the latest developments in some of the more important daily and weekly indicators that she tracks. Two big things she’s learned over the last week: (1) bearishness continued to build among both institutional and individual investors, based on her review of the latest updates from CFTC on asset manager positioning in US equity futures, and the weekly individual investor survey from AAII. Second, she sees evidence that worsening virus trends may be starting to adversely impact consumer and small business behavior, putting the rebound in the S&P 500 at risk.

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In this edition, Lori discusses the results of her latest quarterly US equity investor survey, which was conducted June 15th – 22nd and included mostly institutional US focused equity investors. There are two key findings. First, bearish outlooks on the US equity market are rising, while bullish views are retreating. Second, the survey identified several things behind the increase in bearishness – valuation concerns have risen to a new survey high, most of our participants expect a long, slow recovery, and fears of a 2nd wave of the coronavirus are high as are worries about the outcome of the 2020 election in the US.

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In this edition, Lori discusses two trends she’s keeping a close eye on right now. The first is the extent to which incoming economic data is positively surprising forecasters, something that’s been an important driver of US equity market performance recently. The second is the performance of the most popular stocks in actively managed, long-only Large Cap funds (known as the Lions), which experienced an important reversal in fortunes in mid-May.

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In this edition, Lori discusses Small Caps, both her outlook for the Russell 2000 and performance trends in the top stocks of Small Cap portfolio managers. Tactically, she expects Small Caps to continue outperforming Large Caps as long as the broader US equity market remains in rebound mode, and to underperform Large Caps in any pullbacks. In terms of the performance of Small Cap managers’ favorite stocks, she’s seen several sharp reversals in performance recently, with the most popular stocks outperforming strongly YTD, lagging in the late March – early June rebound, and a return of outperformance in Thursday’s sharp sell-off.

In this edition, Lori discusses the China trade war, the civil unrest in the US, and the outlook for S&P 500 earnings. The stock market has been more focused on the China trade war than the protests because the implications of the trade war are more clear. On Earnings, she highlights how the rate of upward revisions is starting to improve, helping stocks for now by feeding the “things are getting less bad” narrative. She also reiterates her view that there’s still risk lurking in 2021 estimates, which could be a problem for the market later this year. 

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In this edition, Lori discusses her takeaways on the latest hedge fund filings. The most popular stocks in hedge funds have been outperforming throughout the first half of 2020. Hedge funds ended 1Q20 with greater exposure to Health Care.

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In this edition, Lori discusses her thoughts on the outlook for the S&P 500. She expects US equity markets to stay choppy in the months ahead and another drawdown. There’s no change to her year-end S&P 500 target of 2750.

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In this edition, Lori discussed her thoughts on how 1Q20 reporting season for the S&P 500 is shaping up and the key lessons learned. 2021 EPS growth forecasts have continued to slip, but still seem too aggressive. Company commentary suggests investors need to prepare for a long, slow and uneven recovery. Health Care jumps out as a bright spot.

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In this edition, Lori reviews the narratives driving the late March/April rebound in the S&P 500, plus the historical playbook for past rebounds in the stock market coming out of recessions as well as those that occurred during prior QE periods. Lori believes the rally is legitimate but fragile. So far, the composition of leadership is mostly in line with what we’ve seen in recovery trades associated with past recessions.

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