Consumer Staples
Highlights Portfolio Strategy The consumer staples recovery is sales-driven, underscoring that additional outperformance lies ahead. The lagging hypermarkets and retail food industries are starting to play catch up, reflecting a shift in consumer spending patterns. Use the drubbing in air…
Feature The on-going Second Machine Age - the ushering in of Artificial Intelligence (AI) - is obsoleting human jobs at an alarming pace. But an analysis of the data reveals an interesting pattern. Jobs typically done by men have suffered disproportionately, and continue to be in grave danger.…
Highlights Portfolio Strategy A window has opened up for utilities outperformance. Upgrade to overweight on a short-term (1-3 month) view. Leading indicators of beverage sales have improved, heralding an upgrading in depressed expectations. Stay overweight. The pullback in consumer finance…
The hypermarkets industry is enjoying a number of green shoots, indicative of an imminent recovery in relative sales growth. Wal-Mart noted that store traffic continues to improve, albeit aided by discounting. Still, the need to slash prices to attract more customers should abate. According to…
Highlights Portfolio Strategy Add the S&P asset manager & custody banks index to the high-conviction overweight list. Prospects for higher interest rates bode well for a catch up phase with the rest of the financials sector. Initiate a long S&P consumer staples/short S&P…
Highlights Key Portfolio Highlights Improved world economic growth and rising inflation expectations have buoyed global equities (Chart 1). The downside is that financial conditions are tightening and U.S. dollar-based liquidity is contracting, which is growth restrictive (Chart 2). The…
The S&P containers & packaging group offers a more attractively valued alternative to play a transportation recovery than either rails or air freight. Global export volumes have begun to rebound, consistent with the increase in U.S. port traffic and intermodal (consumer) goods shipments…
The sharp packaged food share price decline means that difficult conditions are now being discounted. Sales growth expectations have cratered, reflecting the negative impact of food price deflation and the strong U.S. dollar on this export-dependent industry. However, the strong currency no…
Highlights Portfolio Strategy The elevated ratio of market cap-to-GDP discounts strong growth far into the future, suggesting that a market validation phase may be lurking. Capital markets-sensitive stocks have had a good run, but the six month outlook is more mixed than bullish. Lift the…
