The S&P communications equipment index received a substantial leg up in the past month as the quarterly results issued by index giant Cisco proved more resilient than anticipated and growth surpassed analyst expectations. However,…
Cisco Systems, the communications equipment index heavyweight, reported tough quarterly results that highlighted the issues continuing to strain the industry. Revenues have continued to fall as telecom carriers, the key customer group,…
The signal from communications equipment stocks continues to worsen. Communications equipment pricing power is experiencing decade-high decline rates and the ratio of new orders to inventories has rolled over, both of which indicate the…
Communications equipment stocks have diverged negatively from the broad tech sector and now trade broadly in line with telecom carrier stocks - a key end-market, with a slight lag. The latest signal from telecom services stocks is…
Highlights Portfolio Strategy Downgrade communications equipment stocks to underweight. All three end-markets are weak and signal that profits will continue to surprise to the downside. Continue to avoid the electrical components…
The previous Insight showed that the broad tech sector will have trouble if overall inflationary pressures continue to build, sustaining upward pressure on bond yields. The communications equipment sub-group should be somewhat immune to…
Communications equipment stocks broke out of a long-term downward sloping trend-line on the back of productivity improvement this summer, powered by a marked productivity improvement. Indeed, our productivity proxy, defined as sales/…
Highlights Portfolio Strategy If the Fed is about to begin interest rate re-normalization in earnest, then investors should heed the message from historic sector performance during tightening cycles. The tech sector remains…
Stocks are flirting with new highs, courtesy of a gradualist Fed and the reduced threat
of incremental near-term U.S. dollar strength.