The Rolling Bear Market took out the last holdouts - Tech, Discretionary, and Growth Stocks - in October. The Rolling Bear Market has morphed into a Chopping Bear Market and we think the rest of 2018 will be a bumpy ride.
We prefer Value over Growth; Value outperformed Growth in October’s sell off. We think that was the beginning of a longer lasting leadership change.
Third quarter earnings results have been strong; we think this quarter will likely represent a peak in year over year earnings growth. The fourth quarter will get much harder as we lap numbers that received a boost from hurricane and tax reform related spending.
A link to the full report is posted in the Subsciiber's Area.
The rotation out of highly interest rate sensitive sectors and into dividend growth companies remains a significant factor in this market. The underperformance of the extended FANG sector is a significant issue because just about all of its constituents have lost uptrend consistency and, as a group, they represent significant weightings in the major stock market indices.