Consumer Discretionary
Buy Homebuilders Sell Home Improvement Retailers…
Highlights Portfolio Strategy Vibrant and broad-based bank credit growth, pristine credit quality, pent up bank buyback demand and a V-shaped recovery in bank ROE more than offset the risk of 10/2 yield curve inversion, and suggest that the path of least resistance is higher for the S&P…
Both autos and automotive components stocks have been underperforming, the former since 2013 and the latter quite dramatically since the beginning of 2018 (top panel). This in spite of light vehicle sales stuck at persistently elevated levels that have driven auto components new orders to all-…
In a recent Insight Report ,1 we highlighted the collapse in valuations that were making us grow more constructive on the S&P internet retail index. In fact, sky high valuations were what kept us on the sidelines in the first place in our early-2018 initiation of coverage on the sector.2…
Underweight (High-Conviction) The flattening of both fixed residential investment and existing home sales (bottom panel) have given us cause for concern with respect to home improvement retailers (HIR). While we remain bullish on the domestic housing market, HIR have seen huge…
Highlights Our leading indicator for China’s old economy continues to point to slower growth over the coming months, which is consistent with the bearish message from China’s housing market and forward-looking export indicators. We would caution investors against interpreting the recent…
Rebuilding From The Basement…
Feature The European stock market has a hidden gem: its clothing and accessories sector. Since the turn of the millennium, the sector’s profits are up by a thousand percent (Feature Chart). In this Special Report we propose that the megatrend has further to run, as its principle driver is still…
Remodeling Our View On Home Improvement Retail…
Highlights Portfolio Strategy Higher interest rates, with the Federal Reserve tightening monetary policy three more times in the next seven months, will be the dominant theme next year. All four of our high-conviction underweight calls are levered to this theme. The later stages of the U.S.…