Overview
The Month At A Glance…………………………………………..6
Recap……………………………………………………………...7
Performance Recap………………………………………………8
Key Themes & Developments
2Q09 Earnings – Better Than Expected …..…………………10
2Q09 Earnings – Cyclicals over Defensives …………….…...11
2Q09 Earnings – It’s still a Margin Story………………………12
Earnings Revision – Upgrades Continue................................13
Earnings Estimates – No Stopping Consensus Estimates….14
Breadth – Back to Bull Market Levels …………………………15
Performance – Sector Rotation Underway…………………....16
Seasonality – A Quiet Period…………………………………...17
Interest Rates – Month-End Rally Not Enough… …………....18
Interest Rates – Declining Spreads……………………….……19
Small Business Growth Indicators …………………………….20
Credit Market – Continues to Heal.……………… …………..21
Global Monetary Policy – Tightening Remains On Hold…….22
Economic Data – Broad Improvement Now Evident..………..23
Energy – Oil & Stocks Diverge………………………...............24
Commodities – Base Metals Leading The Charge...………....25
Macro Indicator Watch
Growth Watch – Green Shoots Emerging………….………….27
US Housing – A Bottom or Head Fake?..................................28
US Housing – Delinquencies Decline, but a Blip?....................29
Credit Growth Weak, Less Tightening of Standards ….………30
Equity Market Performance & Outlook
S&P 500 Total Return By Industry Group……………..……….32
What’s Working? Low Quality, Low ROE………………………33
Emerging Markets Outperforming……………………………….34
Domestic Cyclicals Outperformed Global Cyclicals in July…..35
Emerging Markets Outperformed This Month………………….36
Small Caps Edge Ahead on YTD Basis…………….…………..37
Improvement Continues……………………………..……………38
Growth Outperforming Value YTD……………………………....39
Valuations Remain in Neutral Territory……………………...….40
Sentiment Improving on Most Counts.………………………….41
Sentiment Neither Bullish Nor Bearish………………………….42
Sector Rotation: Still Weak Signals……………………………..43
Corporate Actions Still Falling…………………………………...44
Cash Positions Declining………………………………………...45
Stocks With High Short Interest………………………………. 46
Recent US Strategy Research…………………………………..47