The U.S. Census Bureau released their factory shipments and inventories data and the message from beverage makers was bleak. The steep decline in shipments that started at the end of Q1 has accelerated and inventories have continued to…
Highlights Portfolio Strategy Swap consumer staples into financials in our pair trade versus the tech sector. Relative profit fundamentals signal that this relative share price ratio will soon come alive. Global growth tailwinds…
Neutral The S&P hypermarkets index has been a stalwart performer YTD, outshining both the broad consumer staples universe and the overall market by a wide margin. However; this impressive run-up is unsustainable. Three main…
Highlights Portfolio Strategy The rally in the S&P restaurants index has run its course and a profit recovery is fully discounted. Lock in profits and downgrade to neutral. Intensified inter-industry competition, the onslaught of…
Consumer staples equities in general and beverage stocks in particular have been stellar outperformers this year. Nevertheless, this strength may prove fleeting as our leading profit indicators have all taken a decisive turn for the…
Highlights Portfolio Strategy The latest wobble in the financials sector is a buying opportunity, with the exception of the defensive insurance index. Our tactical overweight in utilities has played out. Take profits and downgrade to…
Our upgrade of packaged food stocks to overweight (see our Weekly Report of 23 May, 2017 for more details) was based on the expectation of near-term margin expansion followed by an eventual sales recovery. This thesis is supported by…
Highlights Portfolio Strategy Upgrade packaged food stocks to overweight. Enough value creation has occurred to create an attractive entry point in this consumer goods sub-index. Our tactical overweight in the S&P utilities…
Highlights ECB policy is set to become less dovish relative to other central banks. Stay long the euro; stay underweight German bunds within a global bond portfolio; and overweight euro area Financials within a global Financials…