April 23, 2019

Valens Market Phase Cycle Monitor & Corporate Credit Macro View for April 2019


  • As covered in this month’s Litman Letter, the market’s sentiment (aka “the voting machine”) continues to provide buying opportunities where fundamentals tip the scales toward more upside (aka the “weighing machine”)
  • Profits and profitability continue to rise to all-time highs across US corporations (UAFRS-adjusted, accurate calculations)
  • US firms likely to use profits to increase capital investments in 2019
  • Business credit is flashing early warning signals for 2020 or 2021 – and all clear signs for 2019
  • The combination of profitability and growth, with low-to-no credit risk, suggests continued US equity upside in 2019
  • Our highest conviction long equity ideas that fit into current market dynamics are:

CVS Health Corporation (CVS)
eBay Inc. (EBAY)
Capital One Financial Corporation (COF)

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