The market has been held hostage by surging rates. Zombie companies are “alive” and are multiplying – they are highly sensitive to surging borrowing costs. Underweight Utilities to reduce portfolio duration. Maintain neutral…
Fertilizer prices will continue to move lower as the natgas price shock touched off by the Russian invasion of Ukraine dissipates. As a result, we expect grain prices to soften another 10% this year. Food-price inflation will move…
Neutral It no longer pays to be bearish chemicals stocks as a depreciating dollar will be a material tailwind for the sector. The chart on the right shows the close correlation between EURUSD and relative chemicals’…
Cyclical & Secular Underweight We remain underweight the S&P interactive media & services (IM&S) subgroup on both cyclical and secular (ten-year basis) time horizons as increasing regulation will likely deal…
Underweight The S&P chemicals bear market has entered its third year and we remain underweight this capital intensive basic materials subgroup. China macro dominates the direction of US chemical equities. Chinese…
Highlights Portfolio Strategy China’s monetary easing, the resilient US dollar, weak operating industry metrics and a looming margin squeeze all signal that an underweight stance is still warranted in the S&P chemicals index.…
S&P Materials (Neutral) Downgraded from Overweight S&P Chemicals (Underweight) Downgraded from Neutral Besides being exposed to the toxic U.S. manufacturing data, S&P chemicals are also taking a hit from the…
Global macro headwinds will continue to weigh on this deep cyclical index as the risk of a full-blown trade war will likely take a bite out of final demand. Chemical producers garner 60% of their revenues from abroad (a full 20…
Highlights Portfolio Strategy Macro headwinds, deficient demand along with rising chemicals stockpiles that have dealt a blow to industry pricing power warn that chemicals stocks are on the verge of a breakdown. Downgrade to a below…