There are no changes to the recommendations from Northlake’s thematic models for July.  The Market Cap model is recommending large cap for the fourth consecutive month and the Style model has a neutral reading for the second consecutive month.  With no changes, Northlake client assets following the Market Cap model will remain invested in the S&P 500 (SPY).  Style model assets will continue to be split evenly between the Russell 1000 Growth (IWF) and the Russell 1000 Value (IWD).

There was underlying movement in the models that could lead to changes in the recommendations over the next few months.  The historically strong large cap readings from April through June have moderated.  This is due to the relative strength of small caps so far this year moving several of the technical and trend internal indicators from large cap to small cap.  The Style model is on neutral but close to reverting back to growth.  Growth has been the dominant theme since May of 2017.  There remains a split in the Style model where the technical and trend internal indicators favor growth but the economic-driven external indicators recommend value.  This is due to the fact that economic data shows strength in the U.S. economy but investors continue to favor mega cap growth stocks.

Quarterly client letters going out this week discuss recent performance of the models in detail.  The Style model has done quite well in 2018 since it has favored growth for three of the past six months.  The Market Cap model is also ahead of the benchmark in 2018 but less so.  It benefited primarily from capturing early 2018 relative strength in mid caps before the model moved to a large cap reading in April.

SPY, IWD,  and IWF are widely held by clients of Northlake Capital Management, LLC, including in Steve Birenberg’s personal accounts.  Steve is sole proprietor of Northlake, a registered investment advisor.  Northlake’s regulatory filings can be found at www.sec.gov