Table 1 Following up from last week’s SPX dividend discount model (DDM) update, we complement our research with two additional ways of approximating the SPX fair value: EPS and multiple sensitivity analysis, and a…
Overweight (Downgrade Alert) In this Monday’s Weekly Report we put the S&P managed health care index on downgrade alert to reflect, at the margin, recent negative news. Over the past five weeks unemployment…
Highlights Real Yield Curve: Last week’s negative oil print could signal the peak in deflationary sentiment for this cycle. It’s a good time for bond investors to enter real yield curve steepeners. Buy a short-maturity real…
Highlights Inflation-Linked Bonds: The plunging price of oil has put renewed downward pressure on global bond yields via lower inflation expectations. With oil prices set to recover over the next 6-12 months as the global economy…
Highlights Portfolio Strategy We remain comfortable with a 3,000 SPX fair value estimate backed up by our DDM, forward ERP and sensitivity analyses. The path of least resistance remains higher for the SPX on a 9-12 month cyclical time…
Neutral Following up from last week’s report, we heed the message from our research to be wary of staples stocks at the depth of the recession and downgrade the S&P packaged foods index to neutral. Food & beverage store…
Overweight We recently monetized over 50% relative gains in our overweight S&P software portfolio position by temporary going to neutral, but we are compelled to lift this heavyweight tech sub-index back to an overweight…
Highlights Yesterday we published a Special Report titled EM: Foreign Currency Debt Strains. We are upgrading our stance on EM local currency bonds from negative to neutral. Before upgrading to a bullish stance, we would first need…
Highlights Social distancing makes it impossible to do jobs that require close personal interaction, yet these are the very job sectors that have kept jobs growth alive in recent decades. If social distancing persists, then AI will…
Since 2017, we have been updating our SPX dividend discount model (DDM) every April when the previous year’s annual S&P 500 dividend payment is finalized from the Standard & Poor’s. Table 1 on the next…