Highlights The current burst of inflation in developed economies is due to a (negative) supply shock rather than a (positive) demand shock. Consumer complaints of “poor buying conditions” mean that higher prices will cause…
This deteriorating demand backdrop more than offset the industry’s reaction function, which has been intra and inter-industry M&A. Now that the M&A dust has settled, what is next in store for the industry? There…
Highlights Portfolio Strategy As growth becomes scarce, investors flock to sectors that are slated to outgrow the broad market and shy away from the ones that are forecast to trail the SPX’s growth rate. This week we rank…
Neutral The battle of the titans of the U.S. media sector for control of Sky PLC was resolved over the weekend, with Comcast emerging victorious, besting 21st Century Fox's bid for the pay-TV firm. While increasing global…
Neutral The specter of Netflix, as well as other tech giants circling the space, has accelerated an inter- and intra-industry consolidation (second panel). We were well positioned for this shake up in the space as we went underweight…
Highlights Portfolio Strategy Selling in the S&P cable & satellite index is overdone. Recession type valuations fully reflect the acquirer discount heavyweight CMCSA is still commanding. Lift exposure to neutral. Content…
Underweight (Upgrade Alert) The narrative for the S&P cable & satellite index this year has been an ongoing (and accelerating) loss of share of the consumer's wallet (second panel) as over-the-top providers continue to…
Underweight The S&P cable & satellite index was under intense pressure last week as the quarterly release of subscriber churn numbers for the constituent companies came out worse than expected. In particular, CHTR saw its stock…
Underweight Declining share of the consumer's wallet has been the narrative for media stocks for several years (top panel). Millennials, currently the largest U.S. age cohort, have been "cord cutting" and preferring…
Highlights Portfolio Strategy Quantitative tightening, a rising fed funds rate and higher prices at the pump are all bearish consumer discretionary stocks. Downgrade exposure to underweight. We are executing this interest rate-…