While we reiterate our recent overweight call on the S&P homebuilding index1 and the high-conviction underweight call on the S&P home improvement retail (HIR) group,2 it also makes sense to initiate a market neutral…
Highlights Portfolio Strategy Vibrant and broad-based bank credit growth, pristine credit quality, pent up bank buyback demand and a V-shaped recovery in bank ROE more than offset the risk of 10/2 yield curve inversion, and suggest…
Both autos and automotive components stocks have been underperforming, the former since 2013 and the latter quite dramatically since the beginning of 2018 (top panel). This in spite of light vehicle sales stuck at persistently elevated…
In a recent Insight Report ,1 we highlighted the collapse in valuations that were making us grow more constructive on the S&P internet retail index. In fact, sky high valuations were what kept us on the sidelines in the first place…
Underweight (High-Conviction) The flattening of both fixed residential investment and existing home sales (bottom panel) have given us cause for concern with respect to home improvement retailers (HIR). While we remain bullish…
Highlights Our leading indicator for China’s old economy continues to point to slower growth over the coming months, which is consistent with the bearish message from China’s housing market and forward-looking export…
Overweight After reaching their post-GFC highs in the middle of 2017, the S&P homebuilders index put in a seven-year bottom in October, though has since recovered to roughly the level where we upgraded to overweight.1 The…
Underweight (High-Conviction) While the probability of a housing recession remains low, we are concerned that too much euphoria is already priced in the S&P home improvement retail (HIR) index, and there are high odds that…
Highlights Portfolio Strategy Higher interest rates, with the Federal Reserve tightening monetary policy three more times in the next seven months, will be the dominant theme next year. All four of our high-conviction underweight…