Strategas Daily Macro Brief Prepared by Strategas Securities, a Baird Company June 17 2021Should Rates Rise, Consumer Staples Will Likely LagJune 16 2021Buybacks Have Returned With 1Q Totaling $178BNJune 15 2021Technology Beginning to Outperform Financials AgainJune 14 2021Mentions of Supply Chain in Transcripts Moving LowerJune 11 2021Interest Expense as a Percent of Debt Near 25 Year LowsJune 10 2021Tech 2022 Income Revisions Higher Than YTD PerformanceJune 9 2021Sales Volumes & Increased Costs Cited as Reasons for Lower EarningsJune 8 2021Operating Margins Highest in 10-YearsJune 7 202187.5% of Companies Beat Earnings Estimates in 1Q'21June 4 2021Margin Debt Growth SlowingJune 3 2021Vehicle Sales Have Recovered Since Last MayJune 2 2021Share of Positive Guidance ElevatedJune 1 2021Value vs. Growth Relative Valuations Remain ExtremeMay 27 2021Double Digit Revenue Growth Expected for Remainder of YearMay 26 2021Confidence Data Not Supportive of Further Curve SteepeningMay 25 2021Google Searches of "Inflation" Just Off Peak PopularityMay 24 2021EPS Growth Becomes Important Return Contributor During RecoveriesMay 20 2021Remembering Rising Rates of 1994May 19 2021Watching for Second Wave of Re-Opening as Mask Mandates DroppedMay 18 2021Top 5 Contribute More Income to the Index than Market-CapMay 17 2021With 90% Earnings Growth Still Greater than 50% for Q1May 14 2021Inflation On the RiseMay 13 2021Stocks Correlated with Rates Continue to FallMay 12 2021Central Bank Balance Sheet Growth Slowing and Should ContinueMay 11 2021Dollar Cycles Suggest an Extended Period of WeakeningMay 10 2021Nearly 90% Reported, 1Q Earnings Up BigMay 7 2021Negative Yield Debt Down to $13 TrillionMay 6 2021Average Oil Price Heading Toward 2018 LevelsMay 5 2021Buyback Announcements Picking UpMay 4 2021Performance Underwhelming for Companies Beating EstimatesMay 3 2021Every Sector Saw an Improvement in 1Q Earnings Growth Last WeekApril 30 2021Earners Beginning to Turn HigherApril 29 2021Biotech IPOs & Additional Offerings See a Fast Start to the YearApril 28 2021Consumer Confidence Pointing to a Flattening CurveApril 27 2021Significant Discussion Around SPAC Underperformance of LateApril 26 2021Earnings Growth Moves Higher in Week 2April 23 2021Market Declined When Proposed Higher Capital Gains Hits TapeApril 22 2021Real Estate a Relative Winner from Higher Corporate TaxesApril 21 20212021 Strategist Estimates Continue to ClimbApril 20 2021Cash on Balance Sheets Still $2 TrillionHowever, the most recent data point is just off of the highs that was seen during the fourth quarter.April 19 20211Q Earnings Season Off to a Strong StartSales growth expectations also improved to 9.4% from 8.6%.April 16 2021Smaller Businesses Planning to Increase PricesNFIB report indicates sharp price hikes over the next three months.April 15 2021Industrial Sector Margins Coming Under PressureUphill battle trying to return to pre-Covid margin levels given rising input costs.April 14 2021As Expected Inflation Rate Jumps to 2.6% Year-Over-YearStrategas will not be surprised to see readings near 4% - like 2011.April 13 2021Warmer Weather and Easy Comps a Tailwind for Diner GrowthYear-over-year % change in U.S. seated diners has been improving since late December 2020.April 12 2021U.S. M&A Activity Beginning to Slow But Remains Above AverageAfter a torrid pace in the fourth quarter, activity is beginning to slow.April 9 2021Dividends Paid Negative Year-Over-YearFirst time since 2010. However, might be making a comeback.April 8 20212021 EPS Growth Expected to be Stronger for EAFEEstimated growth currently for 2021 is expected to be 35% MSCI EAFE vs. 25% S&P 500.April 7 2021Manufacturing PMI As Good As It Gets?Recently surged to a multi-decade high.April 6 2021Estimated Margins Continue to ExpandSuggestive the market could continue to move higher.April 5 2021Can the Recovery be Sustained Beyond the Reopening Surge?Airline & hotel bookings in the 4th quarter will be of particular interest.April 1 2021Continually Rising Past Due Commercial Real Estate LoansLoan to deposit ratio continues to slide (a possible headwind for bank outperformance).March 31 2021Consumer Confidence Surges Beating Consensus EstimatesThe differential between expectations and the present situation continues to slide.March 30 2021Real Rates May Have to Move to Positive TerritoryRates still have room to move higher.March 29 2021Likely Proposed Tax Increase Will Hurt S&P EarningsIf enacted, a decrease of 6% is expected from two corporate provisions. March 26 2021Year over Year Percentage in Margin Debt is ElevatedReturns are more muted when margin debt is elevated.March 25 2021Tech Multiples Spiked as Yields Declined, Reverse is Happening NowA recovery in earnings will naturally lead to multiple compression.March 24 2021Further Yield Steepening May Be DifficultA lot of the good news is already baked in.March 23 2021Next 12 Months Sales Above Pre-Covid LevelsYear-over-year comparisons will be easy until back half of the year.March 22 2021Revenue Growth Expectations for 1Q Earnings Season are 8.6%Financials set to see 24% top-line growth.March 19 2021Breaking Down the Rise in 10-Year Treasury YieldsAttributable more to a rise in real yields than a surge in inflation expectations.March 18 2021EnergyEarnings-per-share likely higher than expected. March 17 2021Next 12 Month Earnings Per Share Continues Its Steady Move HigherThe latest reading is above $180 and has the potential to rise even further.March 16 2021Average Rate Rise Was 1.8% During Prior Interest Rate IncreasesShould interest rates fail to rise further, it would be smaller than prior rising rate periods over the last 30 years.March 15 2021American Rescue Plan Benefits Companies With Underfunded PensionsEnables them to contribute less this year and future years. March 12 2021Next Move for S&P Multiple is LowerEarnings trough recently occurred in the fourth quarter 2020.March 11 2021Materials OutperformanceCorrelated with rising commodity prices.March 10 2021Russell 2000 Non-Earners Peaked in December 2020Historically, a peak has coincided with the end of recessions.March 9 2021No Clear Market Cap Winner Year Two of Bull MarketSmall caps have a resounding edge over large caps in year one. March 8 2021Senate Passes $1.9 Trillion Stimulus PackageCongress will have authorized $3 trillion of stimulus for 2021.March 5 2021Rolling 65-Day Stock-Bond Correlation Turns NegativeFirst time negative since 2016.March 4 2021Trucking Prices AcceleratingE-commerce has accelerated the need for logistical services.March 3 2021IPO Activity at Historical RecordsCapitalizing on robust risk appetite in a hot market environment.March 2 2021Use of the Word "Inflation" Breaking OutSearch trends "inflation".March 1 20214Q Earnings Season Wrapping UpStrong showing across the board. February 26 2021Investor Survey: Results & TakeawaysTilt towards value-oriented sectors of Financials and Energy and biggest risk interest rates and inflation.February 25 20211 Year Change in 10-Year Yields is Positive for the First Time Since 2019Perhaps real yields matter more as the change still remains well in negative territory.February 24 2021Dollar Weakness Will Likely Lead to Gold BidInverse relationship present.February 23 2021Dividend Payers Still Lagging Non-PayersTrend accelerated when companies were rewarded for holding onto cash.February 22 2021Companies Beating Even the Highest Analyst EstimatesMore than half of the Technology, Healthcare and Industrials companies are beating the highest analyst estimates.February 19 2021Number of Publically Listed Companies RisingAmidst the recent boom in IPOs, the number of public companies is now above 6,000.February 18 2021Longer-Term Staples Offer Solid Risk-Adjusted ReturnsAnnualized total return for the sector ranks 4th best based on data from 1990 forward.February 17 2021Next 12 Months Improvement Losing MomentumThe two sectors that led the recovery - technology and healthcare - are showing signs of slowing.February 16 20214th Quarter Earnings and Revenue Growth Both PositiveEarnings 17%+ above estimates, outpacing the historical long-term average surprise of 3.6%,February 12 2021Market Valuations 2021 vs. 2000Today's levels remain well short of the incredible multiples seen 20 years ago.February 11 2021The Consumer is About to be Re-LeveredReiteration that monetary policy will remain accommodative. February 10 2021Transportation & Food Second Largest Component of InflationJust shy of 1/3 of the index and both are pointing to higher prices.February 9 2021Bond Investors Not Getting Paid for the Risks They Are TakingA dramatic back up in yields could result in a significant loss of principal, wiping out income.February 8 20214Q Earnings Expected to Grow 2.4% Year Over YearNext 12 months earnings per share approaching pre-COVID levels.February 5 2021"How to Buy Stocks"Search count higher than at 2020 low. Notable uptick in retail interest as plenty of cash remains on the sidelines.February 4 2021Macro Backdrop Improving for FinancialsMany positive catalysts but companies will need to follow through.February 2 2021Insider SellingRatio vs. buying spikes, but it may not be all bad news.February 1 20214Q Sales Growth Turns PositiveEarnings growth not far off either.January 29 2021Investing in High Short Interest is Not a Long-Term StrategyNot a reliable factor for the long-run and has been unable to drive sustainable returns for the last roughly 30 years.January 28 2021Days Like Yesterday Are Never Easy, But Perspective HelpsDespite the selloff, the next 12 months EPS progression for the S&P 500 continues to march higher. January 27 2021Could Re-Opening be the Catalyst for Asset Prices to Decline?Buy the rumor, sell the news? January 26 2021"Stock Market Bubble" Interest Over Time Highest Dating Back to '04No question the market is experiencing historically extreme valuations, but is it a "bubble"?January 25 2021Earnings Growth Improves Week 2 With Strong Showing for FinancialsFinancials now expected to grow 15.1% this quarter.January 22 2021If the U.S. Government Were a Company, Would You Buy It?Improving margins, a trend supportive of a rising stock market. Margin declines signal impending fundamental weakness, and forecast S&P 500 sell-offs in 2011, 2015, 2018, and even 2020 well. Improvement here is a sign of health.January 21 2021Investor Survey: Results & TakeawaysThe percentage who believe the next 10% move in stocks is higher has fallen to 44% after reaching 68% in November.January 20 2021Next Driver of Equities is Likely EarningsIt’s common for earnings to take over as the driver of returns at this point in the recovery, leading to an unwind of elevated multiples as cyclical sectors’ earnings recover.January 19 2021Q4 earnings season update: Week 1 With only a few firms reporting, index-level growth estimates have improved significantly.January 15 2021Cyclical Sectors Often Look Expensive Early in RecoveryImpressive recent outperformance of cyclical sectors. These areas often look expensive early in recoveries before earnings have normalized.January 14 2021Energy SectorThough 2020 was a challenge, 2021 seems brighter: Energy sector EPS is expected to bottom in Q4, and oil is on track for its first quarterly gain since 2018January 13 2021Online Sales Continue to Grow Greater Than 25%Those companies able to shift to providing customers an online experience will continue to garner the bulk of sales.January 12 2021Most Valuation Metrics at Historical ExtremesMost of which are near the 100th percentile of historical readings. Earnings are the difference vs. 2000.January 11 20214Q Revenue Growth Estimates Are Less Than ExcitingThough expectations are for a headline earnings decline, Technology, Materials, Consumer Staples, and Healthcare are expected to show some growth.January 8 2021Consumer Confidence in Housing Falls Two Consecutive MonthsConcerning if trend continues while one in every four employed is concerned about losing their job, a sign of just how fragile the recovery still is.January 7 2021Robust capital Market Activity Boosting M&A Advisory FirmsExpecting booming capital markets theme to continue including surging IPO transactions, healthy M&A appetite, and record bond issuance.January 6 2021History Suggests Dollar Weakness Should PersistAll signs point to a weaker dollar in the future as the expanding budget and trade deficits have impact for years to come.January 5 2021U.S. Dollar and Inflation Break-evens Inversely CorrelatedTech and Energy historically best performers in times of rising inflation.January 4 2021S&P Finishes Up 16.3% Despite a Recession and 34% DrawdownStrategas examines company fundamentals including the strong dividend performance and returns from 2020, but notes that P/E ratios are historically elevated.December 23 2020Market Timing Incredibly Difficult; Time Horizon Matters MoreMissing only the 5 best days over the past 25 years results in an annualized return -1.9% less than fully invested.December 22 2020During Swift Increases In Rates, S&P Returns Hang In ...A rising rate environment has historically hindered multiple expansion. December 21 2020Financials Gain Regulatory Clearance to Buy Back StockFinancials have been one of the biggest sectors for buyback activity over the last decade; this has historically been a boon for EPS figures.December 18 2020What Do Recent Trends Mean for the Active Manager?A historically volatile market, followed by a swift uptick, and returns returning to the mean. December 17 2020Energy Best Performing Sector Since First Vaccine AnnouncedStill -30% year-to-date and facing an interesting year ahead.December 16 20202020 December Investor Survey: Results and TakeawaysNotably, 49% of clients now believe the next 10% move in the S&P is higher, after reaching 68% last month, the highest level since April.December 15 2020Delinquencies Remain Subdued Despite Economic RecessionConsumer expectations remain subdued despite the economic recovery, vaccine introduction, and stronger-than-expected debt/equity profile post-recession.December 14 2020Negative Yielding Debt Reaching a New HighNegative-yielding debt reached another all-time high ($18.4B), indicating demand for sovereign debt remains strong.December 11 2020Inflation and U.S. Stock-Bond CorrelationStock-bond and intra-S&P 500 correlations tend to spike during broad selloffs. Largely returned to normal since March/April.December 10 2020Lowest Level of Health Care M&A Since 2012At 16.2X forward earnings, the sector is trading near the greatest discount ever when compared to the S&P 500. Largest discounts occurring over the last five months.December 9 2020A Look at CashBank deposits at all-time highs with Tech and Energy cash levels below 5-year average.December 8 2020Net Debt and Interest Expense TrendsDebt has risen throughout the crisis, but so has the ability to pay down.December 7 20202020 Earnings Recovery Greater for Small-CapsEarnings recovery in 2021 is forecast to be significantly stronger in small-caps than large, even when using 2019 comps.December 4 2020Stocks Still More Attractive Than BondsBull case for equities heading into 2021 is the relative un-attractiveness of bonds. Ultra-low yields and improving earnings profiles are favorable for stocks.December 3 2020Pandemic Accelerated Soft Capex While Hard Capex FellTech stocks possess a resilient earnings profile that has both boosted the sector during the pandemic and differentiated it from the dot-com bubble.December 2 2020IPOs Surge, M&As Rebound, and High-Yield Issuances Reach New RecordSigns of optimistic sentiment and corporate animal spirits returning to markets. A strong pipeline awaits December.December 1 2020Cash is KingCompanies with large cash holdings on the balance sheet are outperforming and growing.November 30 2020Company Debt Repayment May be More Widespread in 2021Elevated cash holdings suggest debt repayments and growing dividends. November 27 2020Pandemic Holiday Shopping vs. Historical Seasonal TrendsHow will the retail season play out this year? Elevated savings could be a catalyst for increased holiday spending.November 25 2020Stock BuybacksWhile buybacks have suffered this year, they are beginning to return and could provide a nice tailwind for equities.November 24 2020Dividend Payers: Earnings, Dividend Cuts, SustainabilityS&P 500 dividend landscape after a challenging year. Though positive dividend actions are increasing, dividend payers as a group continue to lag the broad market.November 23 2020Week 6 of EarningsRecap as 95% of S&P reported. Impressively, earnings growth continues to improve as results roll in, boosted by steadying profit margins.November 20 2020Employment Data and TrendsJob cuts are in-line with prior recessions, losses are concentrated in entertainment and leisure sector.November 19 2020Emerging Markets Earnings Recovery Surpassed the U.S.Strong case for Emerging Markets as rapidly rising forward earnings estimates, a weaker US Dollar, and commodities strength should boost the asset class. November 18 2020What Small-Cap Q3 Earnings Tell UsJust broke out of a 2+ year bear market and the only asset class to outpace inflation every decade.November 17 2020Choppy Signals in Reopening DataNotably, both restaurant traffic and mobility data have plateaued since July and have begun to tick down.November 16 2020Earnings Seasons Week 5Improvements slow as earnings season nears end.November 13 2020Multiple Expansion as a Performance Driver 2020Earnings down, multiple expansion is driving positive S&P return year-to-date.November 12 2020Investor SurveyResults and takeaways.November 11 2020Recent Market RotationLooking similar to past “tantrums” (i.e. the 2013 Taper Tantrum and 2016 post-election run). Difficulty determining if a sustained shift is taking place with inflation and/or tech regulation as catalysts.November 10 2020Is it Time to Go to the “B.E.A.C.H.”?Bookings, entertainment, airlines, casino/cruise lines, and hotel stocks. Large beneficiaries from an easing of Covid related travel and leisure anxiety and restrictions.November 9 2020Q3 Earnings Season90% of the S&P is reported. Earnings growth is positive across most sectors, with top-line improvement and profit margins particularly noteworthy.November 6 2020EnergyLong term direction impacted by Senate Outcome. November 5 2020Post-Election TrendsAsset class volatility was down across the board yesterday, despite the unknown outcome. Bond volatility was down more than -25%.November 4 2020Longer TermTrends that shape markets – the long-term cyclicality of the USD, stock market multiples, commodities, and Growth vs. Value.November 3 2020S&P 500 Companies have $2 Trillion of CashA pick-up in M&A activity suggests companies are looking to acquire, but dividends are increasing again, as well.November 2 20203Q Earnings Crushing ExpectationsGreatest percentage of companies beating estimates on record. October 30 2020COVID-19 Earnings Recovery Identical to Global Financial CrisisBoth time periods - next 12 months Earnings Per Share values increasing by over 14% 120 days since bottoming.October 29 2020S&P Has Worst Day Since JuneComparing the two declines: Covid cases were rising, election chaos was being discussed, and oil was declining.October 28 2020Mergers & AcquisitionsPent-up demand, potential for higher taxes, and lack of other growth prospects are tailwinds for M&A in the next handful of months.October 27 2020Yesterday's Sell-Off Due to the recent increase in COVID-19 cases and stalled stimulus talks. Also significant, the high yield bond sector and longer-term issue to increased company debt.October 26 2020Week 2: Earnings SeasonContinued progress as estimates were overly pessimistic. October 23 2020Pandemic Drives Mix Shift in Personal ConsumptionAt 70% of US GDP, consumption is key to any sort of sustainable recovery. Luckily, consumers have continued to spend despite declining credit options. The shift from services to goods has also been marked.October 22 2020The Only Asset Class to Outpace Inflation Every Decade?Perhaps the most compelling long term reason to own small-caps is simply as a hedge against inflation.October 21 2020Gold, an Inflation Hedge?Reviewing the relationship between Gold and inflation over several decades shows mixed results.October 20 2020Growth vs. ValueReturn differential exceeding two standard deviations. One of Strategas' most requested charts. October 19 2020Financials Surpass Expectations Handily The aggregate consensus-estimated growth rate for the sector improved from -21.6% to -7.1% for the 3rd quarter, with 49 companies left to report.October 16 2020U.S. Expensive Compared to International EquitiesS&P 500 is one of the most expensive global markets. A notably weaker U.S. dollar presents attractive opportunities abroad as the jagged global economic recovery progresses.October 15 2020Financials Held Captive to Level of Interest RatesWithout a rise in rates, it’s difficult for Strategas to see a material change in the broader view toward Financials as a whole.October 14 2020What Will Companies Do With Additional Cash?Watching this earnings season for intended cash use in capex, share repurchases, dividend payments, company acquisitions, or debt repayments.October 13 2020Revenues Expected to be Soft 3QPerhaps down -4.3% for the S&P 500. Health Care expected to report growth of nearly 8% vs. Energy's decline of -33%. This is in comparison to the 3rd quarter of 2019.October 12 20202020 October Investor Survey: Results & TakeawaysThe most consensus calls currently are 1) Long Tech/Growth, 2) Biden Victory, & 3) Low Rates For Longer.October 8 2020Materials Sector FocusWith 57% of Materials revenue derived outside of the U.S., the sector stands to benefit from a weaker dollar.October 7 2020Small-Caps EPS Growth Still NegativeEarnings over the next 12 months remain down more than 30% from beginning of the year levels, but the pace of decline is slowing.October 6 2020No Dividend Cuts or Suspensions In SeptemberSince the uptick of cuts and suspensions March through May, negative dividend actions have slowed significantly as business conditions begin to stabilize.October 5 2020Increase in High-Yield and Investment Grade Bond IssuanceU.S. corporations topping $2T in issuances so far this year. Cash on corporate balance sheets at an all-time high.October 2 2020Central Bank Balance Sheets are Growing Near 40%Global Central Banks continue to be accommodative in a world of ultra-low interest rates. Strategas to believe equities are still the best alternative.October 1 20202021 Could be a Year of Global Synchronized GrowthAs earnings growth estimates across the world are predicted to be up double-digits and merger & acquisition activity looks poised for a rebound.September 30 2020Consumer Confidence is Moving UpDespite elevated levels of unemployment and expiration of extended benefits. Also continuing troubles for small restaurants.September 29 2020Performance Following Elections Historically StrongFrom a purely political standpoint, the markets would benefit from getting past the election.September 28 2020Travel Survey Points to an Uptick in Leisure Travel DesireLikely a pent-up demand for travel in the next twelve months with families spending their summers locally.September 25 2020Plenty of Cash Remains On The SidelinesThere’s room for new money to enter the market and become a tailwind for equities. The current correction may prove to be a timely opportunity for investors to increase equity exposure.September 24 2020Housing Market Continues To Be StrongDemand for new homes has risen because of the perceived health and safety issues with living in cities and dense urban areas.September 23 2020Technology Exposure Matters for Index ReturnsA global phenomenon. September 22 2020Equities Remain a Yield Oriented PlayOrdinarily, one would assume an equity investment has more risk over 10-year treasures but that may not be the case this time with treasury rates so low.September 21 2020Earnings Revisions Bounced Back StrongPerhaps helped by a better than expected 2Q reporting season and fiscal aid. Gains in the future will get more difficult, but forward earnings estimates continue to rise.September 18 2020Dividend Increases Showing Signs of LifeThough early, increasing dividend payments is a signal that business conditions may be slowly finding stable ground.September 17 2020Beginning to See an Uptick in Positive COVID-19 CasesAccompanied by a downturn in high-frequency mobility data, likely weather related, but a prolonged move lower would be an ominous sign for economic activity.September 16 2020August Credit Card Spend Decelerates for the First Time Since AprilLikely that this trend could persist until a catalyst to stimulate consumption arrives.September 15 2020Technology Next 12 Months Earnings Per Share Above Pre-Covid LevelsDespite the recent pullback in the technology stocks, this is not 1999/2000.September 14 2020Survey: Investors Now Believe the Next 10% Move is HigherFor the first time since March's sell-off, more investors believe the next 10% move in the S&P 500 is higher rather than lower. September 11 2020Consumer Comfort Reaches New Recovery HighFar from its pre-crisis peak though. The consumer will play a vital role for the U.S. economy to repair. September 10 2020After Jumping, Small Business Delinquencies are Moving LowerDelinquencies for small businesses continue to show signs of improvement which bodes well for Banks in the upcoming quarter.September 9 2020Corporations Issuing Longer-Dated Maturities Hard to argue this doesn’t make sense with rates at historic lows and the near-term business environment challenged. Financials and consumer-oriented firms leading the pack.September 8 2020Permanent Job Losers Remains a ConcernLikely hindering the full recovery of the labor market despite lock downs concluding throughout the U.S.September 4 2020Unprecedented Out-performance, Time For a Breather?Multiple blips during the past decade for growth’s out-performance of value, but head fakes every time.September 3 2020Commodity Bottom Synonymous With Dollar TopThe negative correlation has been elevated since March lows. The dollar looks slightly oversold and any rallies could correspond with commodity weakness.September 2 2020Dividend Cuts/Suspensions SlowingThe trend has slowed significantly, likely a function of business starting to stabilize.September 1 2020S&P 500 Upward Earnings Revisions ImprovingAs a % of total revisions. Supports the recent equity rally, but could make things challenging in coming months. August 31 2020Cash on the Sidelines Still Elevated Despite Market RallyThe personal savings rate and cash in money market funds have risen to extreme levels. Potential tailwind impact to equities in the future. August 28 200Stocks Outperforming BondsBond proxies (e.g. defensive sectors) are making new relative lows vs. the broad market despite a drop in bond yields that historically would be an ideal macro backdrop for the space.August 27 2020Spread Between Top 5 and Bottom 495 Widest EverThe six-month rate of change differential is 42%, which is even greater than what it was during the dot.com bubble. With the top 5 making up almost 24% of the index now, caution remains warranted.August 26 2020Future Expectations of Consumers Continue to SlideConsumer confidence remains above where it was during the Great Financial Crisis, but yesterday marked the lowest reading since the “Great Lock-down.”August 25 2020S&P 500 Companies Have More Room to Cut CostsCompanies turn to cost cutting to maintain earnings. Currently, significantly less than the previous two recessions.August 24 2020Entering a Weak Stretch for OilOil has enjoyed an impressive run thanks to a weak US Dollar and reopening efforts, but could be approaching a difficult stretch, as October and November have historically been the weakest months.August 21 2020Bottom 495 Showing Signs of LifeA broadening out of the rally would be welcomed news to market participants. Since the end of June, the bottom 495 companies are up almost 10%.August 20 2020COVID-19 Accelerating E-Commerce TrendThe 4.3% increase in e-commerce market share for 2Q was roughly equivalent to the gain made in the five years prior. The key now is how much will stick post-pandemic.August 19 2020Consumer Discretionary Still Most Disconnected from FundamentalsWith substantial exposure to Amazon, concentration risk (mostly to the upside lately) is a concern. However, the equal-weighted index has turned a corner. August 18 2020REITs in a Very Challenging EnvironmentSignificantly lagging as the pandemic accelerates the flight from urban living and working areas. August 17 2020Comparing Recent P/E Expansion to the Great Financial CrisisCharts suggest multipliers could expand even further.August 14 202010-Year Yields Reach Highest Levels Since JuneA recent increase above 70 basis points, generally a positive sign for the economy at large. But, if the rise in nominal yields lead to an increase in real yields, it may signal trouble for gold.August 13 2020Large-Caps Edge Out Small-Caps When Dollar WeakensThough a weaker dollar tends to slightly favor large-caps, small-cap Earnings Per Share estimates are rising at a faster pace recently. August 12 2020Valuation a Better Indicator of Long-Term ReturnsLong term gains may be harder to come by and point to ~5% annualized returns over the next 10 years. August 11 2020Percent of Companies Beating Estimates Tops 80%Represents the highest reading on record based on data available back to the first quarter 1994.August 10 2020Mixed Government Expected to Remain Next JanuaryTrump remains out of favor among Strategas' clients, with only 39% odds. However, 59% now believe Republicans will still control the Senate, up 3% from July. August 7 2020Fab Five Greater Income & Sales GrowthThe concentration is extreme and growing earnings and sales at much faster rates than the rest of the index and driving multiple expansion. A scenario that has self-corrected in the past.August 6 2020Highest Level for Oil Since Failed OPEC+ Deal March 6thCrude traded to its highest level as prices have been aided by economies reopening, stockpile draws, and OPEC+ production cuts. August 5 2020Returns This Year Top HeavyThe five largest stocks in the S&P 500 have, for the most part, driven returns this year. Apple generates more net income than the Russell 2000. August 4 2020Retail Dominates Share of Total Discretionary BankruptciesIs the brick-and-mortar to online shift permanently impaired these businesses, even post-crisis?August 3 2020S&P Upward Earnings Revisions AcceleratingAnalysts revising earnings estimates higher in a “V-shaped” fashion, a development last seen after the Great Recession. July 31 2020Worst Post-War GDP Print on RecordU.S. real GDP declined by -32.9% q/q annual rate in the second quarter.July 30 2020Emerging Markets Historically a Strong Performer When the Dollar WeakensReturns averaged 16.6% compared to 11.5% for U.S. equities and 11.6% for Developed International shares.July 29 2020Drop in Consumer Expectations Bullish for StocksS&P 500 tends to perform better than average over the proceeding 12 months with similar magnitude changes in expectations.July 28 2020Technology Infrastructure a Long-Term WinnerWhat is less well known, is how well the data center and tower REITs fared despite the overall REIT sectors under performance.July 27 2020Forward Price to Earnings Nearing Tech Bubble LevelsThe pace of multiple expansion over the last four months will be challenging to sustain, and we would expect it to slow in the second half.July 24 2020Stocks Fall Back Into Favor With AmericansAs their favorite long-term investment at nearly 28%, with real estate close behind. However, cash is next at 18% despite historically low money market and bank deposit rates.July 23 2020State and Local Government Fallout Still Widely UnknownWhile pent-up demand may help retails sales rebound, elevated structural unemployment is likely to persist at varying levels. Municipalities will certainly be looking for federal aid.July 22 2020Second Quarter Weakest for Mergers & Acquisitions Activity on RecordAt only $22 billion. For comparison purposes, volumes were $73 billion during the Financial Crisis and $60 billion during the Tech Bubble. July 21 2020Major Asset Class Performance Year to DateThe rally back in riskier assets has come as a surprise with the only asset class in our shortlist down significantly is oil.July 20 2020Real Yields Near Record Lows10-year real yields continue to slide and are now approaching record lows.July 17 2020Strong Recovery in Traffic of Prospective Home BuyersThe potential V-shaped recovery developing in traffic of prospective buyers off of the April lows should create a tailwind for housing in the 2H of the year when combined with record low mortgage rates.July 16 2020A Weaker Dollar May Be Here to StayCompanies with high foreign sales should benefit while inflation becomes a concern.July 15 2020Small Business Owners' Sales Expectations Recover QuicklyNational Federation of Independent Business (NFIB) reports net % expecting higher sales improved 37 points to a net 13% of owners. July 14 2020Earnings Season Kicks Off Today with BanksBanks will likely provide the best clues, at least initially, on the state of the consumer.July 13 2020Majority of Investors Looking for Next 10% Move to be LowerWhile 66% (of Strategas clients) believe the next 10% move for the S&P will be lower, 87% believe the S&P will make a new high by the end of 2021.July 10 2020Consumer Comfort for Incomes Over $100,000 StallingA reason for caution. While the trend could re accelerate, the pause will likely linger if the second wave of coronavirus cases continues to spiral. July 9 2020Five Largest S&P Companies Continue to Gain ShareAccount for 22.5% of the overall index from a market cap-perspective.July 8 2020Record Pace in Credit DowngradesStandard & Poor’s made just short of 1,000 credit downgrades in the U.S. in 2Q’20 alone.July 7 2020Recovery ContinuesDeclining U.S. Dollar Index (DXY) historically good for equities. July 6 2020Permanent Job Losers RisingForward 12-month S&P Earnings Per Share reflecting slow and steady improvement in analyst expectations for the coming year. Currently, analysts believe earnings should continue to improve over the next twelve months, but that could change should outlooks weaken.July 1 2020Consumer Expectations Remain ElevatedTwo beliefs: the majority of individuals furloughed believe it's temporary and fiscal policy replaced most or all of income lost. This continues to bear out the need for more stimulus this summer.June 30 2020Could Rising Cases Impact 3Q Data?Hospitalizations are well below April levels, key to preventing nationwide shutdowns. However, additional stimulus is critical as the virus spreads and prevents widespread reopeningJune 29 2020Consensus Believes 2Q Will Be Trough EarningsSkeptical of a recovery to pre-COVID levels by 3Q21. Skepticism exacerbated by above-average uncertainty, as only 49 firms have provided Q2 EPS guidance.June 26 2020Volatility Likely to Remain ElevatedNews and noise of COVID-19, lack of company forward guidance, recovery from trough levels of economic activity, and the incoming U.S. presidential election. June 25 2020Fed's Annual Comprehensive Capital Analysis and Review ReleasedSources and uses of cash under baseline and stressed economic & financial market conditions.June 24 2020A Tick Lower In Forward 12-Month EarningsWhile one day does not make a trend, the moves lower in Technology and Health Care were unexpected. June 23 2020Reminder: Market Timing is DifficultParticularly in the current environment and the benefits of dollar-cost-averaging during downturns. June 22 2020Highlighting Four Recent Topical NotesJune 19 2020Cash Levels Just Beginning to Turn LowerAs a percentage of S&P market cap, cash levels are smaller than during the Global Financial Crisis which may indicate the tailwind is shorter-lived.June 18 2020Economic Surprise Index SurgesBetter than expected economic results have appeared to create a “V” shape from a growth rate perspective, but actual levels are still below those seen pre-crisis.June 17 2020Rebound in Retail Sales Suggests Consumer StrengthYesterday’s retail sales print came in stronger than expected at 17.7% M/M relative to a consensus estimate of 8.3%.June 16 2020Corporate Bond ETFs See Tremendous InflowsFollowing yesterday’s announcement that the Fed would begin buying individual corporate bonds. In the second quarter, inflows of almost $42B.June 15 2020Google Trends Shows "Day Trading" Peaked June 9thImportant to remember, the move off of the March 23rd bottom has been strong and broad-based.June 11 2020Slower Economic Growth for LongerA dovish Fed coupled with growth shares (and inherently, Technology companies) in a stretch of out-performance not seen since the late 1990’s.June 10 2020Ample Liquidity for NowLikely protects from wide spread solvency issues for the time being. Perhaps a rising risk is that improving economic data causes the Fed to let up on the gas pedal.June 9 2020Earnings Estimates Attempting a BottomWhile there is certainly risk that estimates turn lower again, for now, the earnings tide appears to be coming in again.June 8 2020Nonfarm Payroll Surprised on FridaySurged +2.5 million in May as lower-paid workers were added back quickly. The unemployment rate declined to 13.3% from 14.7%.June 5 2020Nonfarm Payroll Report Later This MorningUPDATE: Big Beat. Surprise to the Upside: +2.5M, while unemployment registers 13.3%. Certainly, there is some noise in the data, but this is an overwhelmingly positive report.June 4 2020Rising Federal Healthcare Spending Bodes Well for Healthcare EquitiesHealth Care equities have done well and are likely taking a breather but ultimately are going to need to be part of the solution going forward.June 3 2020Small-Cap Debt to EBITDA at Multi-Year HighsThe U.S. trailing 12-month debt to EBITDA multiple for the overall Russell 2000 index is rising quickly as earnings are wiped out, and debt is rising.June 2 2020ISM: Cautiously OptimisticAfter April's contraction, which ended a period of 131 consecutive months of growth, May's PMI registered up 1.6 percentage points to 43.1 percent. June 1 2020Tale of Two DollarsStrong in Asia while losing steam against the Euro. May 29 202030-Year Mortgage Rates Hit New LowCould act as a catalyst to encourage consumers to remain engaged in the housing market despite the negative economic backdrop.May 28 2020Credit Spreads NarrowingUnprecedented actions taken by the Fed to sure-up credit markets have narrowed spreads.May 27 2020Consumers' Future Expectations Still ElevatedRisk appetite has been impressive as traditional measures of ‘risk-on’ price action remains consistent with what is typically seen coming off market lows.May 22 2020Mobility Trends Headed In The Right DirectionDriving trends have returned to the baseline levels from January of this year and walking trends are almost there.May 21 2020Domestic Equities Have Higher Exposure to GrowthMay 20 2020Beginning To See The Molodovsky Effect With Multiples Opportunistic times to buy equities longer-term with the high price to earnings ratios associated with the bottom of economic cycles due to depressed earnings.May 19 2020Front Month Crude Normalizing As Economy Reopens May 18 2020Rising Food Prices Skewing Consumers' View of PricesMay 15 2020Consumers Sentiment and Stocks DivergeMay 14 2020Market Seasonal ChoppyMay 13 2020Small Businesses Concerned About SalesMay 12 2020Declining Global Remittances an Issue for Emerging MarketsMay 11 2020Economic Recovery Centers on Consumers NowMay 8 2020Non Farm Payroll Report Expected To Be BadMay 7 2020Grim Outlook from the Forward Curve May 6 2020Bad Data Steak Continues with Non-Manufacturing Index ReadingMay 5 2020Weak Economic Data Continues with Factory OrdersMay 4 2020Supply Issues RemainMay 1 2020April Was The Best Month For Stocks Since Jan 1987Apr 30 2020Largest Contraction in GDP Since 4Q'08Apr 29 2020Is Gold an Inflation Hedge?Apr 28 2020Investing With a Longer Time HorizonApr 27 2020Economic Data to Watch in the Week AheadApr 24 2020Consensus Earnings Estimates PlummetingApr 23 2020Small-Caps Don't Always Provide Leadership Off LowsApr 22 2020Yield Curve Not a Vote of Confidence, Watching CloselyApr 21 2020Jet Fuel Demand Nonexistent Have a Question Name Email Address Phone Question Thank you! 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