Leuthold’s Major Trend Index held at Low Neutral in its October 19 report, but cyclical momentum is weakening as risk appetite fades. A crack in the AI trade pulled the Nasdaq down 5% from its October 6 high and semiconductors down 16%, though the damage stayed contained as money rotated into defensives. A 16bps drop in the 10-year yield offered relief, while hotter-than-expected inflation kept Leuthold’s Inflation Scorecard elevated at 60/100. Tactical accounts ended the week at a moderate 52% net equity exposure.
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