Overweight The recent carnage in oil markets has breathed a huge sigh of relief into the S&P airlines index (most of which do not hedge fuels costs) as the collapse in WTI crude oil prices has also taken down kerosene…
Dear Client, Next week on November 26th instead of our regular weekly publication you will receive our flagship publication “The Bank Credit Analyst” with our annual investment outlook. Our regular publication service will…
Underweight - Upgrade Alert The S&P airlines index has been buffeted by headwinds arising from the increasing cost of jet fuel; as the top panel of our chart shows, the price of jet fuel is the single largest driver of airline…
Underweight The S&P airlines index got a rare respite last week when United Airlines reported strong results and, perhaps more importantly, scaled back capacity growth plans. Regarding the latter, recall that earlier this year the…
Underweight (Upgrade Alert) It is a well-established rule that where jet fuel prices go, airline stock prices will go the opposite direction. Thus, it is no surprise that the most recent peak in the S&P airlines index coincided…
Highlights Portfolio Strategy A virtuous software capex upcycle will continue to bolster industry sales/profits in the coming months. We reiterate our high-conviction overweight recommendation on the S&P software index. Depressed…
Underweight As recently as three months ago, the U.S. legacy air carriers were being feted for not diving headfirst into fuel hedges, as they had done in earlier cycles to mixed results. Now, with jet fuel prices hitting 3 year highs,…
Underweight U.S. airline stocks hit a patch of turbulence this week when Southwest, usually known for being the price disrupter amongst airline peers, dropped their Q1 revenue guidance "primarily due to the competitive fare…
Highlights The German 10-year bund yield rising to 1%, or the U.S. 10-year T-bond yield rising to 3% would be a trigger to downgrade equities and upgrade bonds... ...especially as the blue sky expectations for global growth in H1 2018…
Underweight United Airlines spooked the market this week when they announced their plans to grow capacity by 4-6% per year until 2020; the stock fell by 11% that day and took the S&P airlines index down with it. Capacity additions…