Overweight This year has been a tough one so far for the S&P packaged foods index. A relative decline in stock prices seems counterintuitive in the context of a surge in manufacturers' shipments and pricing power pulling…

Our upgrade of packaged food stocks to overweight (see our Weekly Report of 23 May, 2017 for more details) was based on the expectation of near-term margin expansion followed by an eventual sales recovery. This thesis is supported by…

Highlights Portfolio Strategy Upgrade packaged food stocks to overweight. Enough value creation has occurred to create an attractive entry point in this consumer goods sub-index. Our tactical overweight in the S&P utilities…

The S&P containers & packaging group offers a more attractively valued alternative to play a transportation recovery than either rails or air freight. Global export volumes have begun to rebound, consistent with the increase in…

The sharp packaged food share price decline means that difficult conditions are now being discounted. Sales growth expectations have cratered, reflecting the negative impact of food price deflation and the strong U.S. dollar on this…

Highlights Portfolio Strategy The elevated ratio of market cap-to-GDP discounts strong growth far into the future, suggesting that a market validation phase may be lurking. Capital markets-sensitive stocks have had a good run, but…

The sudden economic exuberance following the Trump election victory has caused a flight out of traditional safe havens that looks to have gone too far. For instance, consumer products stocks (household products, beverages and packaged…

Economic disappointment will become the key theme in the second half of the year, driving a return to non-cyclical market leadership and a recovery in the growth vs. value ratio.

Consumer goods stocks enjoyed a spirited run at the end of 2015 and into 2016, but have largely consolidated that outperformance this year. However, the S&P packaged food (PF) index has bucked the trend, recently setting a new all-…