Financials

Despite a stellar Q3 earnings print, the S&P 500 had a terrible October as EPS continues to do the hard work in lifting the market (Chart 1). Chart 1EPS Doing The Heavy Lifting EPS Doing The Heavy…

Overweight The S&P consumer finance index, much like their larger financials peers in the S&P banks index, have mostly not participated in the rise in Treasury yields, a relationship that has heretofore been relatively tight (top panel). This is…

Feature In the late 1980s, half of the global stock market capitalization resided in Japan Furthermore, almost a third of the Japanese stock market capitalization resided in banks. It followed that to have a view on the global stock market you had to…

Overweight The recent global move away from risk assets has been a headwind for the high-beta S&P investment bank and brokers index that thrives when risk appetites are healthy. Still, the return of volatility should be a boon to sector earnings;…

Highlights Five risks to our bullish dollar stance need to be monitored: further weakness in the S&P 500; rebounding gold prices; stabilizing EM exchange rates and bond prices; Spanish bank stocks at multi-decade lows; and large, long-exposure by…

Highlights The long term direction for the pound is higher... ...but as the EU withdrawal bill passes through the U.K. parliament, expect a very hairy ride. The stock markets in Norway, Sweden and Denmark are driven by energy, industrials, and biotech…

Overweight - Downgrade Alert Between Friday of this week and Monday of next, roughly 75% of the S&P banks index, representing the nation's largest lenders, will be reporting their Q3 earnings results. Our loan growth and earnings models continue to…

Highlights Portfolio Strategy A playable sector rotation opportunity has emerged, as we first argued at the recent BCA investment conference: Financials, industrials and select tech subgroups will lead the next phase of the market advance, a result of the…

Highlights Set your overall investment strategy with two 'rules of 4' based on 10-year bond yields: If either the Italian BTP or the sum of the U.S. T-bond, German bund and JGB stays above 4 percent, then sell equities and buy bonds. If both the Italian…