Research

Summary: For the industrials sector, we see macro activity softening, recent over-earning, and high inventories, married with high earnings expectations, valuation that is not compelling and optimistic rhetoric. This makes the overall risk reward below average for this sector relative to out sectors in our judgment. We think industrials have done better than expected over

The consumer discretionary stocks have outperformed the market year to date and are up in absolute terms in five of the last six quarters.  As we wrote in an in-depth review of the US consumer this past week, the performance of the consumer sector is a function of investors anticipating a dovish Fed, as typically

To read Trivariate’s recent note on the consumer discretionary sector click here.

To read Trivariate’s recent Level Set on the expectations click here.

The debate in markets has migrated from hard to soft to no landing.  At the crux of the debate is the projected path for the health of the US consumer.  With that in mind, we investigate opportunities in the consumer discretionary sector in today’s research. We investigate the macro and trading trends, the available alpha,

Earnings expectations are typically too optimistic for outyears and decline steadily. In June of 2022, the consensus bottom-up expectations for 2023 S&P500 were $252 in earnings. That sharply declined through the last three quarters of 2022 and steadily declined earlier this year to the current outlook of $219 (see below). That magnitude of decline is

In case you missed it, below is a digest of the most clicked on notes and videos that we published this month.  If you have any questions on these or other topics related to the current environment for investors, please let us know. Level Set – Bear Case, Bull Case, Broadening Case, and Capx /

To read Trivariate’s recent Level Set on the bear case, bull case, broadening case and Capx click here.

The market leads GDP. The recent bullish price action indicates at least one of two things is likely to transpire. Either earnings will be surprisingly good two-to-four quarters from now or we are nearing the beginning of a multiyear earnings cycle akin to the one we saw after the European financial crisis of 2011 that

While fundamentals have exceeded bearish expectations so far this year, it is challenging to justify upside to $5000 on the S&P500 given current macro conditions.  Assuming the consensus bottom-up EPS estimates are accurate, investors would need to pay over 20x earnings at the end of this year on 2024 estimates to justify 10% upside from