Overweight - High Conviction A key beneficiary of the synchronized global capex growth theme that we expect to dominate next year are machinery stocks. Not only are expectations for overall capital outlays as good as they get (…

Highlights Portfolio Strategy Synchronized global capex growth, a derivative of BCA's synchronized global growth thesis, will be a dominant theme next year, benefiting cyclicals over defensives. Three high-conviction calls are…

Overweight We upgraded the S&P construction machinery & heavy truck index to overweight earlier this month, based on a fresh capex upcycle fueled by exceptionally positive expectations for global capital outlays, with…

Overweight Machinery stocks have been in a V-shaped recovery for the past 18 months retracing all of their relative losses since the 2014 highs. Our machinery EPS model is firing on all cylinders (second panel), underscoring that the…

Highlights Portfolio Strategy Industrials stocks are on the verge of a breakout on the back of firming earnings fundamentals. Lift to an above benchmark allocation. Reviving global end-demand is a boon to U.S. machinery equities. Act…

The dominant theme this week in U.S. Equity Strategy has been the acceleration in global trade. South Korea, the archetypal global trade bellwether, saw its exports grow by 16% in the first seven months this year with a 31% increase in…

When we upgraded the S&P industrial machinery group to overweight, we held back the S&P construction machinery & heavy trucks sibling to a neutral weighting. Our reasoning was threefold: heavy truck sales were very weak, the…

The Empire State Manufacturing and Philadelphia Fed Business Outlook surveys typically move in lockstep and their message last week was united; the domestic outlook for manufacturing is exceptionally strong. Both surveys have…

Portfolio Strategy Any meaningful weakness in the U.S. dollar could accelerate the budding recovery in corporate revenue growth after a multiyear malaise. Following this year's underperformance, lift the industrials sector to…

After the election, machinery stocks jumped sharply on the hope that only Trump's growth-oriented policies will be successful while growth-restrictive proposals will be watered down, supporting commodity prices and ultimately…