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…
Neutral When we downgraded the S&P home improvement retail index (HIR) to neutral in September, the core of our thesis was that fixed residential investment as a percentage of GDP appeared to have peaked, up 50% from trough to the…
Neutral In our recent initiation of coverage on the newly minted Communication Services sector, we examined the impact of a variety of technology and consumer discretionary stocks being pulled together to form a new GICS1…
One sector that saw some important changes was the S&P internet retail index, a sub-sector of consumer discretionary, with Netflix and TripAdvisor moving out and eBay moving in. Our thesis of continued elevated profit…
Neutral As we highlighted in yesterday’s Daily Insight, we are firmly housing market bulls. However, we are concerned that too much euphoria is priced into home improvement retail (HIR) equities. Three reasons underlie…
Highlights Portfolio Strategy The firming long-term housing demand backdrop, lumber price cost relief, steady new home prices and favorable new home sales expectations, all signal that it is time to buy homebuilders. On the flip side…
Overweight The S&P home improvement retail index (HIR) has historically benefitted from rebuilding efforts following costly hurricanes hitting the U.S. However, these spikes in relative performance largely track the earnings impact…
Overweight Consumer discretionary giant Home Depot has put together a string of solid earnings reports and outlook improvements that have served to keep the S&P home improvement retail index at its lofty levels for the past several…