12:18 PM EST, 12/27/2024 (MT Newswires) -- The Toronto Stock Exchange is down near 100 points at midday with energy (+0.26%) the sole gainer.

Technology and miners are the biggest decliners, down 1.6% and 1%, respectively.

Ned Davis Research has published a noted entitled 'Breadth noise and trouble in the background'. In it, the research cited as key takeaways: poor December breadth, where the number of declining stocks exceeded the number of advancing stocks, has had limited impact on intermediate term technical indicators.

The research said market-based macro indicators have turned negative, but they could be reflecting year-end positioning more than economic foreshadowing. It added: "The longer market-based macro conditions are weak, the more our disciplined approach would dictate a reduction in equity exposure."

"Overall," the research said, "recession risks remain low. None of the indicators in our Recession Watch Report are in their risk zones, and the Atlanta Fed GDPNow model says growth could exceed 3% in Q4."

It added: "Our conclusion is that the external composite is likely overstating the negative macro backdrop for stocks. The resilience of the internal composite supports our view. The longer indicators remain negative, however, the more our disciplined approach will dictate a reduction in equity exposure from our current maximum allocation of 70%."

For global asset allocation, NDR recommends an overweight allocation to stocks, marketweight allocation to cash, and an underweight allocation to bonds. The recommendations are in line with its Global Balanced Account Model.

NDR's U.S. asset allocation recommendation is 70% stocks (15% overweight), 25% bonds (10% underweight), and 5% cash (5% underweight). On an absolute basis, it is overweight the S&P 500 (year-end 2025 target of 6600). It is neutral on small-caps versus large-caps (implicit overweight to midcaps) and neutral on Growth versus Value.

On international, NDR is overweight the United States, Canada, and Pacific ex-Japan; underweight Emerging Markets, the U.K., and Japan; and marketweight Europe ex. United Kingdom.