Monday, July 21, 2008

Sectors and Styles Strategy Report: July 21, 2008

excerpts from this week’s report:

Model Growth Portfolio (MGP)
“Wow. A fantastic week as the strong underweight in Energy finally paid big dividends producing most of the relative performance gains at 63 basis points. Combined with a modest 13 basis points and no major negatives produced one of the best weekly performance for the MGP (+114 basis points) in its three year history…”

ETF Market Monitor
Econ. Sectors & Industries: “The collapse in Energy along with satisfactory results from key financial institutions generated a role reversal, at least for one week.
Size & Styles: Small caps, particularly Small Cap Value, Micro Cap, and Transports all had a stellar week.
Global: Most global markets did not join the US parade. Energy sensitive countries such as Canada and Brazil faltered.
Other: Along with Oil, Commodities were sharply lower.”

Expected Return Valuation Model
“The rise in the 10 year yield this past week coupled with the modest increase in equity levels reduced the severe undervalued readings. Nevertheless, stocks remain substantially undervalued. (It is also worth noting that the VIX dropped below 25, thereby justifying, for the moment, maintaining the 100 to 120 basis point risk premium – yellow zone.)…”

Moving Averages Scorecard
“Last week’s rally produced some relief for most indices as their near term direction improved. Most notable were the step up from extended (on the downside) to Intact for Consumer Discretionary, Financials, Industrials, Mega Cap, and Large Cap…”

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