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)