Overweight Machinery stocks have been in a V-shaped recovery for the past 18 months retracing all of their relative losses since the 2014 highs. Our machinery EPS model is firing on all cylinders (second panel), underscoring that the…
Highlights Portfolio Strategy Industrials stocks are on the verge of a breakout on the back of firming earnings fundamentals. Lift to an above benchmark allocation. Reviving global end-demand is a boon to U.S. machinery equities. Act…
Dear Client, I had the pleasure of speaking at BCA's Annual New York conference on Monday, where I offered the following trade recommendations. This week's report is a summary of my remarks. Please note we will be publishing our…
Highlights French labor reforms stack up well against German and Spanish predecessors; We remain bullish on French industrials versus German industrials; Populism is overrated in Germany - European integration may not accelerate, but…
The dominant theme this week in U.S. Equity Strategy has been the acceleration in global trade. South Korea, the archetypal global trade bellwether, saw its exports grow by 16% in the first seven months this year with a 31% increase in…
We raised the S&P air freight & logistics group to overweight earlier this year based principally on the index being a chief beneficiary should green shoots in global trade proliferate. Since then, global export expectations…
Underweight For most of this decade, U.S. airline pricing power and the price of jet fuel have moved in lockstep (second panel) i.e.: airlines have been able to pass through their primary input cost. However, this relationship has…
When we upgraded the S&P industrial machinery group to overweight, we held back the S&P construction machinery & heavy trucks sibling to a neutral weighting. Our reasoning was threefold: heavy truck sales were very weak, the…
The gap between the BCA Defense and BCA Aerospace indexes has widened considerably as their respective outlooks have diverged. Aerospace orders have fallen by more than half from their peak in 2013, while defense orders appear to be…