Overweight CSX Corp led off the S&P railroads index in reporting results for the first quarter of 2018 yesterday; the markets were not disappointed and the stock jumped substantially higher. Most notably, the company's…
Highlights Key Portfolio Highlights Our portfolio positioning remains firmly behind cyclicals over defensives, driven principally by our key 2018 investment themes: synchronized global capex growth (Chart 1A) and higher interest…
Highlights There is growing evidence that China's industrial sector is slowing, as are Asian trade flows. EM stocks have seen their tops. Even though current trade tensions between the U.S. and China could well dissipate, we are at…
Neutral In our recent initiation of coverage on the S&P industrial conglomerates sector,1 our neutral investment thesis was that the globally synchronous capital goods upcycle should mostly keep sales and profits buoyant in this…
Overweight (High Conviction) U.S. manufacturers are rarely so excited about exports; the latest ISM manufacturing export subcomponent recently hit a three decade high. While the specter of a global trade spat is disconcerting, our…
Highlights Portfolio Strategy The reward/risk profile of air freight & logistics is extremely attractive. Synchronized global growth, the capex upcycle, a falling dollar and secular advance in e-commerce compel us to add this…
Underweight U.S. airline stocks hit a patch of turbulence this week when Southwest, usually known for being the price disrupter amongst airline peers, dropped their Q1 revenue guidance "primarily due to the competitive fare…
Overweight Railroad stocks have recently seen a spike in forward EPS which has eliminated the valuation premium and now the rails are trading on par with the SPX on a forward P/E basis (second panel). The track is now clear and more…
Highlights Portfolio Strategy Synchronized global growth, a soft U.S. dollar, our resurgent Boom/Bust Indicator and avoidance of a Chinese economic hard landing, are all signaling that it still pays to overweight cyclicals at the…
Overweight S&P defense shares have been enjoying a terrific streak over the past three years, solidly outperforming the S&P 500 in each of them. This is in no small part because of new orders, which have been steadily…