Neutral This week we upgraded the S&P home improvement retail (HIR) index to a benchmark allocation and removed it from our high-conviction underweight list for a small relative loss. Similar to the parent Consumer…
Highlights Portfolio Strategy Rising lumber prices, melting interest rates and profit-augmenting industry productivity gains all signal that it no longer pays to be bearish the S&P home improvement retail (HIR) index. Poor…
Highlights Portfolio Strategy The risk/reward equity market tradeoff is to the downside and we remain tactically cautious. The trade war re-escalation risks pushing out the global growth recovery to early-2020 and has shaken our…
In late-January we put on a market, sector and subindustry neutral trade preferring homebuilders to home improvement retailers (HIR) as a way to benefit from the increase in residential construction at the expense of residential…
Highlights Portfolio Strategy Firming relative demand and input cost dynamics, the Medicare For All (MFA)-induced panic selling in HMOs coupled with 5G euphoria buying in semis have set the stage for an exploitable pair trade…
Underweight (High-Conviction) Home Depot, the S&P home improvement retail (HIR) index heavyweight, reported earnings yesterday that missed expectations as same store sales fell well short of estimates. The company also…
While we reiterate our recent overweight call on the S&P homebuilding index1 and the high-conviction underweight call on the S&P home improvement retail (HIR) group,2 it also makes sense to initiate a market neutral…
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…
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…
Underweight (High-Conviction) While the probability of a housing recession remains low, we are concerned that too much euphoria is already priced in the S&P home improvement retail (HIR) index, and there are high odds that…