Monday, July 14, 2008

Sectors and Styles Strategy Report: July 14, 2008

excerpts from this week’s report:

Model Growth Portfolio (MGP)
“A strong relative performance recovery due to the aforementioned strong underweight in Energy and moderate underweight in Financials along with the absolute positive performance in the Smid growth positions lifted the year to date results to a positive 257 basis points…”

Model Growth Portfolio (MGP) Re-balancing
“One minor portfolio change and one reclassification are being recommended...”

ETF Market Monitor
Econ. Sectors & Industries: Financials were hammered while Healthcare and domestic Consumer Staples and Utilities excelled. Steel also rebounded strongly.
Size & Styles: The Smids (including Micro Cap) and Dow Transports painted a much brighter picture than the S&P 500.
Global: Many global markets tracked the dismal US. However, China, Malaysia, and Singapore did not.
Other: : Commodities did not follow Gold’s good performance.

Expected Return Valuation Model
“A justifiable argument can be made to raise the risk adjustment factor (concurrently lowering the projected P/E ranges) as the real risk of declining earnings occurring next year are now being heard with greater intensity. The stagflation lite scenario. I will hold back on making this change for the moment pending the US government’s action…”

Moving Averages Scorecard
“Further deterioration pushing the total mega trend number to its lowest reading thus far. The one bright spot is the improving near term trend in China…”

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