Estados Unidos
First, up until the last decade, Japan benefited from a robust global economy where trade grew strongly. Europe is entering its second decade of low growth in an environment of much weaker global economic activity. Second, excess capital stock in peripheral…
Europe has a more dire demographic profile than the U.S. It needs to purge capital stock and invigorate its economy through reforms, a smaller public sector, and more diversified financing channels. But can the euro area fare better than Japan has over the…
Evidence continues to mount that global growth is starting to rebound. European GDP was strong in Q1 and Korean exports, another global growth bellwether, beat expectations in April. However, just like how U.S. activity was resilient as non-U.S. growth slowed…
Consumer Spending Consumer spending added a meager +0.8% to GDP in Q1, but core retail sales growth has recovered sharply after having plunged near the end of last year. What’s more, with consumer sentiment close to one standard deviation above its historical…
Much like how core measures of inflation strip out volatile food and energy prices to give a better sense of the underlying trend, we can also look at Real Final Sales To Domestic Purchasers (FSDP) to get a better sense of the underlying trend in economic…
Overweight Last week we highlighted a number of reasons why the S&P movies & entertainment index had turned a corner, underscoring our upgrade to overweight.1 Core to our thesis is that content is king and Disney is the reigning consolidator. Notably, the company’s Avengers property, acquired via the $4 billion acquisition of Marvel a decade ago, just set the record for box office openings this weekend with their latest offering earning $1.2 billion. This bested their own record set last year with an offering from the same media property. Stocks in the S&P movies & entertainment index have been soaring to reflect the eager movie-going sentiment of consumers. Such exuberant consumption of entertainment, combined with Disney-specific optimism from their upcoming streaming service and majority stake of Hulu, an already formidable streaming competitor, should be met with analyst optimism. However, we have seen just the opposite as pessimism has dominated the sell-side and forward EPS are set to materially trail the broad market (second panel), while revisions are headed lower (bottom panel). We think this bearishness should prove fleeting and would lean against it. Bottom Line: Analyst pessimism appears offside in an exceptional box office environment. Stay overweight. The ticker symbols for the stocks in this index are: BLBG: S5MOVI – DIS, NFLX, VIAb. 1 Please see BCA U.S. Equity Strategy Weekly Report, “Mixed Signals” dated April 22, 2019, available at uses.bcaresearch.com.
The second factor weighing on European asset utilization and returns is the poorer level of labor productivity. From the 1950s to the early 1980s, European GDP per worker rose relative to the U.S., albeit peaking at 92% of the levels across the Atlantic. Due…
Like Japanese businesses 30 years ago, European firms have large debt loads. Another problem is the lack of capex opportunities in Europe. Why does our Bank Credit Analyst service make this assertion? The return on assets in Europe is not recovering. In the…
China is not the only factor flashing an unambiguously positive signal for the U.S. cyclicals/defensive ratio. BCA’s global leading economic indicator diffusion index is pushing 65%, underscoring that the majority of the countries we track showcase an…
How much of the looming Chinese recovery is currently priced in the V-shaped cyclical/defensives rebound? Our U.S. Equity Strategy team’s understanding is that while most of the good news is largely reflected in the slingshot recovery in the relative share…