In early October, we initiated a pair trade long S&P industrials/short S&P consumer discretionary, underpinned by four key drivers: interest rates, relative demand, relative export backdrop and relative sentiment. Importantly,…

In the past few weeks, we have tweaked our cyclical portfolio exposure by downgrading early-cyclical consumer discretionary stocks to a benchmark allocation and lifting the late cyclical industrials complex to overweight. We recommend a…

Highlights Portfolio Strategy Go long industrials/short discretionary. Leading indicators of interest rates, relative sentiment, relative demand and relative exports all signal that industrials stocks will outperform their consumer…

Automotive components companies (as well as auto manufacturers) just finished their best month of the year in September (top panel), lifted by expectations of a spike in sales to replace the estimated 700,000 light vehicles destroyed by…

GAA DM Equity Country Allocation Model Update The GAA DM Equity Country Allocation model is updated as of September 29th, 2017. The model sharply reduced its allocation to the U.K. to a bare minimum in response to the tightening in…

Demand for movies and entertainment has come under pressure lately as depicted by the deceleration in recreation PCE. The softness in the ISM services survey confirms the negative signal from the consumer. All of this is transpiring in…

Cable & satellite stocks have been on a tear since troughing at the onset of the Great Recession (top panel). However, on the industry operating front, there are some demand cracks forming. Cable outlays are trailing overall PCE and…

Highlights Portfolio Strategy A more balanced cable & satellite and movies & entertainment industry profit backdrop is signaling that only a neutral stance is warranted in both these media sub-indexes. Trim to neutral. These…

Highlights A major investment theme for the coming years will be the resynchronization of developed economy monetary policies. Expect substantial further convergence between U.S. T-bond yields and both German bund yields and Swedish…

The National Association of Home Builders released their housing market index (HMI) which, while still high, took a step downward. Importantly, the softness in the HMI had already commenced earlier in the summer prior to the…