{"id":2744,"date":"2021-07-08T19:56:21","date_gmt":"2021-07-08T19:56:21","guid":{"rendered":"http:\/\/blog.valuengine.com\/?p=2744"},"modified":"2021-07-08T20:13:09","modified_gmt":"2021-07-08T20:13:09","slug":"mid-year-market-forecasts-2","status":"publish","type":"post","link":"http:\/\/blog.valuengine.com\/index.php\/mid-year-market-forecasts-2\/","title":{"rendered":"Mid-Year Market Forecasts"},"content":{"rendered":"

The ETF reports on ValuEngine for funds that follow market benchmarks provide a side benefit in writing market analyses.\u00a0 They allow me to discuss the implicit forecast for 1-, 3-, 6- and 12-month forecasts our models are making for each benchmark\u2019s ETF portfolio.\u00a0 This is because the ratings and projections combine bottom-up constituent analysis with analyses of the historical price movements of the ETF in different market environments.\u00a0\u00a0\u00a0<\/span><\/p>\n

All of the approximately 5,000 stocks, 16 sector groups, 140 industries, and 500 ETFs have been updated on\u00a0www.ValuEngine.com<\/a><\/strong><\/h5>\n
Free Two Week Trial to all 5,000 plus equities and ETFs covered by ValuEngine\u00a0HERE<\/a><\/strong><\/h5>\n

The benchmark indexes chosen for this feature are:<\/span><\/p>\n

    \n
  1. The S&P 500 Index representing US Large Cap;<\/span><\/li>\n
  2. The S&P 400 MidCap Index representing US MidCap;<\/span><\/li>\n
  3. The Russell 2000 Index representing US Small Cap;<\/span><\/li>\n
  4. The Nasdaq-100, constructed as an index using the top 100 non-financial stocks with primary listing on the Nasdaq, but now regarded as the premier US Big Tech Index;<\/span><\/li>\n
  5. The CRSP US Total Market Index, an all-cap index used by Vanguard to represent the entire US stock market.\u00a0<\/span><\/li>\n<\/ol>\n

    This summary table contains all five indexes and ETFs that hold them. It also includes historical, valuation and informational data for reference.\u00a0<\/span><\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
    <\/td>\nIVV<\/b><\/td>\nMDY<\/b><\/td>\nIWM<\/b><\/td>\nQQQ<\/b><\/td>\nVTI<\/b><\/td>\n<\/tr>\n
    Market Index Being Tracked<\/span><\/td>\nS&P 500<\/b><\/td>\nS&P Midcap<\/b><\/td>\nRussell 2000 Small Cap<\/b><\/td>\nNasdaq 100<\/b><\/td>\nCRSP US Total Market Index.<\/b><\/td>\n<\/tr>\n
    ValuEngine Rating<\/span><\/td>\n3<\/b><\/td>\n2<\/b><\/td>\n4<\/b><\/td>\n4<\/b><\/td>\n3<\/b><\/td>\n<\/tr>\n
    VE Forecast 1-mo. Price Return<\/span><\/td>\n-0.4%<\/b><\/td>\n-0.4%<\/span><\/td>\n-0.4%<\/span><\/td>\n-0.3%<\/span><\/td>\n-0.4%<\/span><\/td>\n<\/tr>\n
    VE Forecast 3-mo. Price Return<\/span><\/td>\n0.9%<\/b><\/td>\n0%<\/span><\/td>\n0.4%<\/span><\/td>\n1.5%<\/span><\/td>\n0.9%<\/span><\/td>\n<\/tr>\n
    VE Forecast 6-Mo. Price Return<\/b><\/td>\n2.9%<\/b><\/td>\n0.8%<\/b><\/td>\n1.4%<\/b><\/td>\n4.1%<\/b><\/td>\n2.8%<\/b><\/td>\n<\/tr>\n
    VE Forecast 1-yr. Price Return<\/span><\/td>\n-5.0%<\/b><\/td>\n-5.7%<\/span><\/td>\n-4.2%<\/span><\/td>\n-3.9%<\/span><\/td>\n-4.9%<\/span><\/td>\n<\/tr>\n
    Historic 6 mo. Price Return<\/span><\/td>\n15.7%<\/span><\/td>\n17.7%<\/span><\/td>\n16.7%<\/span><\/td>\n12.9%<\/span><\/td>\n15.4%<\/span><\/td>\n<\/tr>\n
    Historic 1-Yr. Price Return\u00a0<\/span><\/td>\n38.9%<\/span><\/td>\n55.5%<\/span><\/td>\n65.4%<\/span><\/td>\n42.0%<\/span><\/td>\n43.0%<\/span><\/td>\n<\/tr>\n
    Historic 5-Yr Ann. Price Return<\/span><\/td>\n13.9%<\/span><\/td>\n12.1%<\/span><\/td>\n13.5%<\/span><\/td>\n22.2%<\/span><\/td>\n14.2%<\/span><\/td>\n<\/tr>\n
    Volatility<\/span><\/td>\n15.2%<\/span><\/td>\n19.6%<\/span><\/td>\n21.4%<\/span><\/td>\n16.9%<\/span><\/td>\n15.8%<\/span><\/td>\n<\/tr>\n
    Sharpe Ratio (3-Year)<\/span><\/td>\n0.91<\/span><\/td>\n0.62<\/span><\/td>\n0.63<\/span><\/td>\n1.33<\/span><\/td>\n0.90<\/span><\/td>\n<\/tr>\n
    Beta<\/span><\/td>\n1.00<\/span><\/td>\n1.22<\/span><\/td>\n1.27<\/span><\/td>\n1.01<\/span><\/td>\n1.05<\/span><\/td>\n<\/tr>\n
    Alpha<\/span><\/td>\n0.00<\/span><\/td>\n0.04<\/span><\/td>\n0.07<\/span><\/td>\n0.03<\/span><\/td>\n0.01<\/span><\/td>\n<\/tr>\n
    # of Stocks<\/span><\/td>\n500<\/span><\/td>\n400<\/span><\/td>\n2000<\/span><\/td>\n100<\/span><\/td>\n3753<\/span><\/td>\n<\/tr>\n
    Undervalued by VE %*<\/b><\/td>\n29%<\/span><\/td>\n36%<\/span><\/td>\n53%<\/span><\/td>\n24%<\/span><\/td>\n54%<\/span><\/td>\n<\/tr>\n
    P\/B Ratio<\/span><\/td>\n4.3x<\/span><\/td>\n2.7x<\/span><\/td>\n2.8x<\/span><\/td>\n2.8x<\/span><\/td>\n4.3x<\/span><\/td>\n<\/tr>\n
    P\/E Ratio<\/span><\/td>\n30.3x<\/span><\/td>\n19.8x<\/span><\/td>\nNMF<\/span><\/td>\n45.4x<\/span><\/td>\n46.9<\/span><\/td>\n<\/tr>\n
    P\/S Ratio<\/span><\/td>\n4.2x<\/span><\/td>\n2.6x<\/span><\/td>\n7.9x<\/span><\/td>\n15.2x<\/span><\/td>\n4.3x<\/span><\/td>\n<\/tr>\n
    Div. Yield<\/span><\/td>\n1.3%<\/span><\/td>\n0.9%<\/span><\/td>\n0.8%<\/span><\/td>\n0.5%<\/span><\/td>\n1.4%<\/span><\/td>\n<\/tr>\n
    Expense Ratio<\/span><\/td>\n0.03%<\/span><\/td>\n0.23%<\/span><\/td>\n0.19%<\/span><\/td>\n0.20%<\/span><\/td>\n0.03%<\/span><\/td>\n<\/tr>\n
    Index Provider<\/span><\/td>\nS&P Dow Jones<\/span><\/td>\nS&P Dow Jones<\/span><\/td>\nFTSE Russell Indices<\/span><\/td>\nNasdaq<\/span><\/td>\nCRSP<\/span><\/td>\n<\/tr>\n
    Index<\/span><\/p>\n

    Scheme<\/span><\/td>\n

    		Mkt. Cap Weighting\u00a0<\/span><\/td>\nMkt. Cap Weighting<\/span><\/td>\nMkt. Cap Weighting<\/span><\/td>\nMkt. Cap Weighting<\/span><\/td>\nMkt. Cap Weighting<\/span><\/td>\n<\/tr>\n
    ETF Sponsor<\/span><\/td>\niShares by Blackrock<\/span><\/td>\nSPDRs<\/span><\/td>\n iShares by Blackrock<\/span><\/td>\nInvesco<\/span><\/td>\nVanguard<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

    All ValuEngine ETF reports updated and available:\u00a0Click HERE<\/a><\/strong><\/p>\n

    Most market forecasts are made on the S&P 500 Index.\u00a0 Therefore, all four forecast numbers appear in bold.\u00a0 Although all four time periods are frequently referenced, investment industry publishers that keep \u201cscorecards\u201d of strategists\u2019 forecasts generally focus most on six-month forecast, so that row also has bolded numbers for emphasis.<\/span><\/p>\n

    In order to frame our forecasts, let\u2019s look at the ValuEngine ranking summarizing our models\u2019 views on the overall attractiveness of each ETF holding these indexes.\u00a0 As one might expect, IVV, holding the S&P 500, and VTI holding virtually the entire US stock market, both get ValuEngine Average ratings of 3.\u00a0 The other three indexes, each specializing in one particular market segment, do not.\u00a0 The midcap ETF MDY has a below average rating of 2.\u00a0 Big-Tech standard bearer QQQ and Small Cap IWM both get above average ratings of 4.\u00a0\u00a0<\/span><\/p>\n

    Focusing on the S&P 500 column in the four rows containing our forecasts, our models expect the market to navigate choppily from a mildly down month of July to a relatively flat 3<\/span>rd<\/span> quarter but ending December with the last six months in positive territory with a gain of nearly 3%.\u00a0 However, with a 12-month forecast of -5%, even after that 3% gain, our models right now are forecasting a bit below -7% for the first six months of 2022.\u00a0 We will update you on those forecasts at the end of September and the end of December using this same framework.<\/span><\/p>\n

    What about the other indexes? Since about 80% of VTI\u2019s weight is represented by the S&P 500, any differences between the two tend to be subtle.\u00a0 Given the ValuEngine ratings, it is not surprising that QQQ is projected to outperform IVV and VTI in the next 6 months.\u00a0 While QQQ is also predicted to fall significantly in the first 6 months of 2022, it is projected to incur less of a loss for the 12-month period than the S&P 500.\u00a0 The MidCap MDY is projected to be the worst performer of the 5 ETFs in the next 3, 6 and 12 months.\u00a0 Given that in the past 25 years since it started being recognized as a separate and distinct segment from large cap and small cap, it has generally outperformed both.\u00a0 However, timing in the markets is everything and according to our models, the next 12 months will be a subpar time for the midcap index.\u00a0\u00a0<\/span><\/p>\n

    Financial Advisory Services based on ValuEngine research available:<\/strong><\/h5>\n
    www.ValuEngineCapital.com<\/a><\/strong><\/h5>\n

    Interestingly, the model projects that the small cap Russell 2000 as represented by IWM will not keep pace with the S&P 500 in the next six months but will not fall as badly as the large cap index in the subsequent six months.\u00a0 The relative buoyancy of IWM may be a result of 53% of the small cap stocks in the Russell 2000 being considered undervalued by the market while only 29% of the S&P 500 constituents\u2019 merit undervalued tags.\u00a0\u00a0<\/span><\/p>\n

    The bottom line is that the model is predicting choppy but mildly positive returns for the next 6 months.\u00a0 Although many strategists are looking for a crash to occur this year, our ETF models indicate that if a precipitous correction occurs, it will probably wait until next year to do most of its damage.<\/span><\/p>\n

    By Herb Blank<\/p>\n

    ValuEngine, Inc<\/p>\n

    \n

    _______________________________________________<\/p>\n

    All of the approximately 5,000 stocks, 16 sector groups, and 140 industries have been updated on\u00a0www.ValuEngine.com<\/a><\/h5>\n
    New: Over 500 ETF reports updated weekly.<\/h5>\n
    Financial Advisory Services based on ValuEngine research available through\u00a0ValuEngine Capital Management, LLC<\/a><\/h5>\n
    Free Two Week Trial to all 5,000 plus equities covered by ValuEngine\u00a0HERE<\/a><\/h5>\n
    Subscribers log in\u00a0HERE<\/a><\/h5>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

    The ETF reports on ValuEngine for funds that follow market benchmarks provide a side benefit in writing market analyses.\u00a0 They allow me to discuss the implicit forecast for 1-, 3-, 6- and 12-month forecasts our models are making for each benchmark\u2019s ETF portfolio.\u00a0 This is because the ratings and projections combine bottom-up constituent analysis with … Read more<\/a><\/p>\n","protected":false},"author":7,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[130,1,39],"tags":[1704,1719,1733,1731,1770,1834,1839,1833,1617,1510,1840,1726,28,1656,1766],"_links":{"self":[{"href":"http:\/\/blog.valuengine.com\/index.php\/wp-json\/wp\/v2\/posts\/2744"}],"collection":[{"href":"http:\/\/blog.valuengine.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/blog.valuengine.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/blog.valuengine.com\/index.php\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"http:\/\/blog.valuengine.com\/index.php\/wp-json\/wp\/v2\/comments?post=2744"}],"version-history":[{"count":1,"href":"http:\/\/blog.valuengine.com\/index.php\/wp-json\/wp\/v2\/posts\/2744\/revisions"}],"predecessor-version":[{"id":2745,"href":"http:\/\/blog.valuengine.com\/index.php\/wp-json\/wp\/v2\/posts\/2744\/revisions\/2745"}],"wp:attachment":[{"href":"http:\/\/blog.valuengine.com\/index.php\/wp-json\/wp\/v2\/media?parent=2744"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/blog.valuengine.com\/index.php\/wp-json\/wp\/v2\/categories?post=2744"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/blog.valuengine.com\/index.php\/wp-json\/wp\/v2\/tags?post=2744"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}