Underweight (Upgrade Alert) It is a well-established rule that where jet fuel prices go, airline stock prices will go the opposite direction. Thus, it is no surprise that the most recent peak in the S&P airlines index coincided…
Highlights Portfolio Strategy A virtuous software capex upcycle will continue to bolster industry sales/profits in the coming months. We reiterate our high-conviction overweight recommendation on the S&P software index. Depressed…
Overweight Defense stocks have been range-bound in the last week as geopolitical maneuvering has seen probabilities of conflict on the Korean peninsula swinging wildly back and forth. Using this conflict to value defense equities seems…
Dear Clients, Please note that next week's report will be a joint effort with our geopolitical team, focused on North Korea. The report will be sent to you two days later than usual, on Friday June 8. Best regards, Jonathan…
Highlights China's industrial sector will continue decelerating, while consumer spending is so far booming. The world economy in general and EM in particular are exposed much more to China's industrial sector than to its…
Highlights An examination of the three pillars of China's economy provides an unambiguous signal that a slowdown is underway. This would normally warrant, at most, a neutral allocation to Chinese stocks, but several factors argue…
Highlights Stay overweight Chinese ex-tech stocks for now, despite the recent spell of poor relative performance. Our downgrade watch for Q2 remains in effect, however, as the risks to this position are clearly to the downside. Recent…
Highlights Portfolio Strategy Reviving global machinery end-demand alongside a global capex upcycle, are the key pillars of our high-conviction overweight call in the S&P construction machinery & heavy truck index. The…
Underweight As recently as three months ago, the U.S. legacy air carriers were being feted for not diving headfirst into fuel hedges, as they had done in earlier cycles to mixed results. Now, with jet fuel prices hitting 3 year highs,…
Overweight Defense stocks were battered this week as, despite earnings exceeding expectations and both guidance and forecasts moving higher, the market sold off. It appears a softer tone from President Trump with respect to North Korean…