As we get ready to review the Q4 earnings report, stocks have rallied sharply over the last two months. As we have discussed previously, it will be unsurprising that we will see a high percentage of companies “beat” Wall Street estimates. Of course, the high beat rate is always the case due to the sharp downward revisions in analysts’ estimates as the reporting period begins. The chart below shows the changes for the Q4 earnings period from when analysts provided their first estimates.
In theory, a group of leading companies serving a very large and growing market should also be a solid investment opportunity. Testing this theory using a look-back of the actual performance of a basket of leading Consumer Discretionary brands offers some proof to this thesis.
In the most recent BLS employment report, the percentage of full-time jobs relative to the population dropped sharply. The robust headline number of 216,000 led most media commentators to suggest a “soft landing” is at hand. However, the decline in full-time employment suggests recession risks are higher than thought.
In the most recent BLS employment report, the percentage of full-time jobs relative to the population dropped sharply. The robust headline number of 216,000 led most media commentators to suggest a “soft landing” is at hand. However, the decline in full-time employment suggests recession risks are higher than thought.
January 12, 2024 - Today’s Producer Price Index report supports the notion that inflation has essentially been defeated. PPI fell to negative headline MoM, 0% core MoM, 1.8% YoY core change, and 1.0% YoY headline change.
As we begin 2024, the state of the consumer is a great place to start. As dedicated consumer spending-focused investors, the state of the consumer is an important variable to understand.
In my opinion, true active strategies have a very important role in portfolios as complements to passive, cheap beta. Advisors need to understand what they own.
October was marked by continued volatility across fixed income and equity markets as investors faced various challenges, including persistent inflation concerns, rising yields, tightening monetary policy, and the backdrop of a U.S. Presidential election.
As an investor, it’s nice to know what we should expect from President Trump, because we have seen the movie before in 2017 – 2021. Apart from the early part of the Pandemic period, the economy and stock markets generally performed well.
Remember, our investment in stocks is a De facto vote of confidence on the economies in which we invest. Earnings, revenue, margins, free cash flow, and the growth of these important metrics is what drives stocks up or down over time.
The discretionary sector struggled as did all growth and quality-oriented areas of the market in 2022. That was a classic re-set and a raging opportunity to add exposure.
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