Broker Check

Strategas Daily Macro Brief

Prepared by Strategas Securities, a Baird Company

June 17 2021

Should Rates Rise, Consumer Staples Will Likely Lag

June 16 2021

Buybacks Have Returned With 1Q Totaling $178BN

June 15 2021

Technology Beginning to Outperform Financials Again

June 14 2021

Mentions of Supply Chain in Transcripts Moving Lower

June 11 2021

Interest Expense as a Percent of Debt Near 25 Year Lows

June 10 2021

Tech 2022 Income Revisions Higher Than YTD Performance

June 9 2021

Sales Volumes & Increased Costs Cited as Reasons for Lower Earnings

June 8 2021

Operating Margins Highest in 10-Years

June 7 2021

87.5% of Companies Beat Earnings Estimates in 1Q'21

June 4 2021

Margin Debt Growth Slowing

June 3 2021

Vehicle Sales Have Recovered Since Last May

June 2 2021

Share of Positive Guidance Elevated

June 1 2021

Value vs. Growth Relative Valuations Remain Extreme

May 27 2021

Double Digit Revenue Growth Expected for Remainder of Year

May 26 2021

Confidence Data Not Supportive of Further Curve Steepening

May 25 2021

Google Searches of "Inflation" Just Off Peak Popularity

May 24 2021

EPS Growth Becomes Important Return Contributor During Recoveries

May 20 2021

Remembering Rising Rates of 1994

May 19 2021

Watching for Second Wave of Re-Opening as Mask Mandates Dropped

May 18 2021

Top 5 Contribute More Income to the Index than Market-Cap

May 17 2021

With 90% Earnings Growth Still Greater than 50% for Q1

May 14 2021

Inflation On the Rise

May 13 2021

Stocks Correlated with Rates Continue to Fall

May 12 2021

Central Bank Balance Sheet Growth Slowing and Should Continue

May 11 2021

Dollar Cycles Suggest an Extended Period of Weakening

May 10 2021

Nearly 90% Reported, 1Q Earnings Up Big

May 7 2021

Negative Yield Debt Down to $13 Trillion

May 6 2021

Average Oil Price Heading Toward 2018 Levels

May 5 2021

Buyback Announcements Picking Up

May 4 2021

Performance Underwhelming for Companies Beating Estimates

May 3 2021

Every Sector Saw an Improvement in 1Q Earnings Growth Last Week

April 30 2021

Earners Beginning to Turn Higher

April 29 2021

Biotech IPOs & Additional Offerings See a Fast Start to the Year

April 28 2021

Consumer Confidence Pointing to a Flattening Curve

April 27 2021

Significant Discussion Around SPAC Underperformance of Late

April 26 2021

Earnings Growth Moves Higher in Week 2

April 23 2021

Market Declined When Proposed Higher Capital Gains Hits Tape

April 22 2021

Real Estate a Relative Winner from Higher Corporate Taxes

April 21 2021

2021 Strategist Estimates Continue to Climb

April 20 2021

Cash on Balance Sheets Still $2 Trillion

However, the most recent data point is just off of the highs that was seen during the fourth quarter.

April 19 2021

1Q Earnings Season Off to a Strong Start

Sales growth expectations also improved to 9.4% from 8.6%.

April 16 2021

Smaller Businesses Planning to Increase Prices

NFIB report indicates sharp price hikes over the next three months.

April 15 2021

Industrial Sector Margins Coming Under Pressure

Uphill battle trying to return to pre-Covid margin levels given rising input costs.

April 14 2021

As Expected Inflation Rate Jumps to 2.6% Year-Over-Year

Strategas will not be surprised to see readings near 4% - like 2011.

April 13 2021

Warmer Weather and Easy Comps a Tailwind for Diner Growth

Year-over-year % change in U.S. seated diners has been improving since late December 2020.

April 12 2021

U.S. M&A Activity Beginning to Slow But Remains Above Average

After a torrid pace in the fourth quarter, activity is beginning to slow.

April 9 2021

Dividends Paid Negative Year-Over-Year

First time since 2010. However, might be making a comeback.

April 8 2021

2021 EPS Growth Expected to be Stronger for EAFE

Estimated growth currently for 2021 is expected to be 35% MSCI EAFE vs. 25% S&P 500.

April 7 2021

Manufacturing PMI As Good As It Gets?

Recently surged to a multi-decade high.

April 6 2021

Estimated Margins Continue to Expand

Suggestive the market could continue to move higher.

April 5 2021

Can the Recovery be Sustained Beyond the Reopening Surge?

Airline & hotel bookings in the 4th quarter will be of particular interest.

April 1 2021

Continually Rising Past Due Commercial Real Estate Loans

Loan to deposit ratio continues to slide (a possible headwind for bank outperformance).

March 31 2021

Consumer Confidence Surges Beating Consensus Estimates

The differential between expectations and the present situation continues to slide.

March 30 2021

Real Rates May Have to Move to Positive Territory

Rates still have room to move higher.

March 29 2021

Likely Proposed Tax Increase Will Hurt S&P Earnings

If enacted, a decrease of 6% is expected from two corporate provisions. 

March 26 2021

Year over Year Percentage in Margin Debt is Elevated

Returns are more muted when margin debt is elevated.

March 25 2021

Tech Multiples Spiked as Yields Declined, Reverse is Happening Now

A recovery in earnings will naturally lead to multiple compression.

March 24 2021

Further Yield Steepening May Be Difficult

A lot of the good news is already baked in.

March 23 2021

Next 12 Months Sales Above Pre-Covid Levels

Year-over-year comparisons will be easy until back half of the year.

March 22 2021

Revenue Growth Expectations for 1Q Earnings Season are 8.6%

Financials set to see 24% top-line growth.

March 19 2021

Breaking Down the Rise in 10-Year Treasury Yields

Attributable more to a rise in real yields than a surge in inflation expectations.

March 18 2021


Earnings-per-share likely higher than expected. 

March 17 2021

Next 12 Month Earnings Per Share Continues Its Steady Move Higher

The latest reading is above $180 and has the potential to rise even further.

March 16 2021

Average Rate Rise Was 1.8% During Prior Interest Rate Increases

Should interest rates fail to rise further, it would be smaller than prior rising rate periods over the last 30 years.

March 15 2021

American Rescue Plan Benefits Companies With Underfunded Pensions

Enables them to contribute less this year and future years. 

March 12 2021

Next Move for S&P Multiple is Lower

Earnings trough recently occurred in the fourth quarter 2020.

March 11 2021

Materials Outperformance

Correlated with rising commodity prices.

March 10 2021

Russell 2000 Non-Earners Peaked in December 2020

Historically, a peak has coincided with the end of recessions.

March 9 2021

No Clear Market Cap Winner Year Two of Bull Market

Small caps have a resounding edge over large caps in year one. 

March 8 2021

Senate Passes $1.9 Trillion Stimulus Package

Congress will have authorized $3 trillion of stimulus for 2021.

March 5 2021

Rolling 65-Day Stock-Bond Correlation Turns Negative

First time negative since 2016.

March 4 2021

Trucking Prices Accelerating

E-commerce has accelerated the need for logistical services.

March 3 2021

IPO Activity at Historical Records

Capitalizing on robust risk appetite in a hot market environment.

March 2 2021

Use of the Word "Inflation" Breaking Out

Search trends "inflation".

March 1 2021

4Q Earnings Season Wrapping Up

Strong showing across the board. 

February 26 2021

Investor Survey: Results & Takeaways

Tilt towards value-oriented sectors of Financials and Energy and biggest risk interest rates and inflation.

February 25 2021

1 Year Change in 10-Year Yields is Positive for the First Time Since 2019

Perhaps real yields matter more as the change still remains well in negative territory.

February 24 2021

Dollar Weakness Will Likely Lead to Gold Bid

Inverse relationship present.

February 23 2021

Dividend Payers Still Lagging Non-Payers

Trend accelerated when companies were rewarded for holding onto cash.

February 22 2021

Companies Beating Even the Highest Analyst Estimates

More than half of the Technology, Healthcare and Industrials companies are beating the highest analyst estimates.

February 19 2021

Number of Publically Listed Companies Rising

Amidst the recent boom in IPOs, the number of public companies is now above 6,000.

February 18 2021

Longer-Term Staples Offer Solid Risk-Adjusted Returns

Annualized total return for the sector ranks 4th best based on data from 1990 forward.

February 17 2021

Next 12 Months Improvement Losing Momentum

The two sectors that led the recovery - technology and healthcare - are showing signs of slowing.

February 16 2021

4th Quarter Earnings and Revenue Growth Both Positive

Earnings 17%+ above estimates, outpacing the historical long-term average surprise of 3.6%,

February 12 2021

Market Valuations 2021 vs. 2000

Today's levels remain well short of the incredible multiples seen 20 years ago.

February 11 2021

The Consumer is About to be Re-Levered

Reiteration that monetary policy will remain accommodative. 

February 10 2021

Transportation & Food Second Largest Component of Inflation

Just shy of 1/3 of the index and both are pointing to higher prices.

February 9 2021

Bond Investors Not Getting Paid for the Risks They Are Taking

A dramatic back up in yields could result in a significant loss of principal, wiping out income.

February 8 2021

4Q Earnings Expected to Grow 2.4% Year Over Year

Next 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 2021

Macro Backdrop Improving for Financials

Many positive catalysts but companies will need to follow through.

February 2 2021

Insider Selling

Ratio vs. buying spikes, but it may not be all bad news.

February 1 2021

4Q Sales Growth Turns Positive

Earnings growth not far off either.

January 29 2021

Investing in High Short Interest is Not a Long-Term Strategy

Not a reliable factor for the long-run and has been unable to drive sustainable returns for the last roughly 30 years.

January 28 2021

Days Like Yesterday Are Never Easy, But Perspective Helps

Despite the selloff, the next 12 months EPS progression for the S&P 500 continues to march higher. 

January 27 2021

Could 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 '04

No question the market is experiencing historically extreme valuations, but is it a "bubble"?

January 25 2021

Earnings Growth Improves Week 2 With Strong Showing for Financials

Financials now expected to grow 15.1% this quarter.

January 22 2021

If 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 2021

Investor Survey: Results & Takeaways

The percentage who believe the next 10% move in stocks is higher has fallen to 44% after reaching 68% in November.

January 20 2021

Next Driver of Equities is Likely Earnings

It’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 2021

Q4 earnings season update: Week 1 

With only a few firms reporting, index-level growth estimates have improved significantly.

January 15 2021

Cyclical Sectors Often Look Expensive Early in Recovery

Impressive recent outperformance of cyclical sectors. These areas often look expensive early in recoveries before earnings have normalized.

January 14 2021

Energy Sector

Though 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 2018

January 13 2021

Online 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 2021

Most Valuation Metrics at Historical Extremes

Most of which are near the 100th percentile of historical readings. Earnings are the difference vs. 2000.

January 11 2021

4Q Revenue Growth Estimates Are Less Than Exciting

Though expectations are for a headline earnings decline, Technology, Materials, Consumer Staples, and Healthcare are expected to show some growth.

January 8 2021

Consumer Confidence in Housing Falls Two Consecutive Months

Concerning 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 2021

Robust capital Market Activity Boosting M&A Advisory Firms

Expecting booming capital markets theme to continue including surging IPO transactions, healthy M&A appetite, and record bond issuance.

January 6 2021

History Suggests Dollar Weakness Should Persist

All signs point to a weaker dollar in the future as the expanding budget and trade deficits have impact for years to come.

January 5 2021

U.S. Dollar and Inflation Break-evens Inversely Correlated

Tech and Energy historically best performers in times of rising inflation.

January 4 2021

S&P Finishes Up 16.3% Despite a Recession and 34% Drawdown

Strategas examines company fundamentals including the strong dividend performance and returns from 2020, but notes that P/E ratios are historically elevated.

December 23 2020

Market Timing Incredibly Difficult; Time Horizon Matters More

Missing only the 5 best days over the past 25 years results in an annualized return -1.9% less than fully invested.

December 22 2020

During Swift Increases In Rates, S&P Returns Hang In ...

A rising rate environment has historically hindered multiple expansion. 

December 21 2020

Financials Gain Regulatory Clearance to Buy Back Stock

Financials 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 2020

What 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 2020

Energy Best Performing Sector Since First Vaccine Announced

Still -30% year-to-date and facing an interesting year ahead.

December 16 2020

2020 December Investor Survey:  Results and Takeaways

Notably, 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 2020

Delinquencies Remain Subdued Despite Economic Recession

Consumer expectations remain subdued despite the economic recovery, vaccine introduction, and stronger-than-expected debt/equity profile post-recession.

December 14 2020

Negative Yielding Debt Reaching a New High

Negative-yielding debt reached another all-time high ($18.4B), indicating demand for sovereign debt remains strong.

December 11 2020

Inflation and U.S. Stock-Bond Correlation

Stock-bond and intra-S&P 500 correlations tend to spike during broad selloffs. Largely returned to normal since March/April.

December 10 2020

Lowest Level of Health Care M&A Since 2012

At 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 2020

A Look at Cash

Bank deposits at all-time highs with Tech and Energy cash levels below 5-year average.

December 8 2020

Net Debt and Interest Expense Trends

Debt has risen throughout the crisis, but so has the ability to pay down.

December 7 2020

2020 Earnings Recovery Greater for Small-Caps

Earnings recovery in 2021 is forecast to be significantly stronger in small-caps than large, even when using 2019 comps.

December 4 2020

Stocks Still More Attractive Than Bonds

Bull 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 2020

Pandemic Accelerated Soft Capex While Hard Capex Fell

Tech 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 2020

IPOs Surge, M&As Rebound, and High-Yield Issuances Reach New Record

Signs of optimistic sentiment and corporate animal spirits returning to markets. A strong pipeline awaits December.

December 1 2020

Cash is King

Companies with large cash holdings on the balance sheet are outperforming and growing.

November 30 2020

Company Debt Repayment May be More Widespread in 2021

Elevated cash holdings suggest debt repayments and growing dividends. 

November 27 2020

Pandemic Holiday Shopping vs. Historical Seasonal Trends

How will the retail season play out this year? Elevated savings could be a catalyst for increased holiday spending.

November 25 2020

Stock Buybacks

While buybacks have suffered this year, they are beginning to return and could provide a nice tailwind for equities.

November 24 2020

Dividend Payers: Earnings, Dividend Cuts, Sustainability

S&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 2020

Week 6 of Earnings

Recap as 95% of S&P reported. Impressively, earnings growth continues to improve as results roll in, boosted by steadying profit margins.

November 20 2020

Employment Data and Trends

Job cuts are in-line with prior recessions, losses are concentrated in entertainment and leisure sector.

November 19 2020

Emerging 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 2020

What Small-Cap Q3 Earnings Tell Us

Just broke out of a 2+ year bear market and the only asset class to outpace inflation every decade.

November 17 2020

Choppy Signals in Reopening Data

Notably, both restaurant traffic and mobility data have plateaued since July and have begun to tick down.

November 16 2020

Earnings Seasons Week 5

Improvements slow as earnings season nears end.

November 13 2020

Multiple Expansion as a Performance Driver 2020

Earnings down, multiple expansion is driving positive S&P return year-to-date.

November 12 2020

Investor Survey

Results and takeaways.

November 11 2020

Recent Market Rotation

Looking 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 2020

Is 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 2020

Q3 Earnings Season

90% of the S&P is reported. Earnings growth is positive across most sectors, with top-line improvement and profit margins particularly noteworthy.

November 6 2020


Long term direction impacted by Senate Outcome. 

November 5 2020

Post-Election Trends

Asset class volatility was down across the board yesterday, despite the unknown outcome. Bond volatility was down more than -25%.

November 4 2020

Longer Term

Trends that shape markets – the long-term cyclicality of the USD, stock market multiples, commodities, and Growth vs. Value.

November 3 2020

S&P 500 Companies have $2 Trillion of Cash

A pick-up in M&A activity suggests companies are looking to acquire, but dividends are increasing again, as well.

November 2 2020

3Q Earnings Crushing Expectations

Greatest percentage of companies beating estimates on record. 

October 30 2020

COVID-19 Earnings Recovery Identical to Global Financial Crisis

Both time periods - next 12 months Earnings Per Share values increasing by over 14% 120 days since bottoming.

October 29 2020

S&P Has Worst Day Since June

Comparing the two declines: Covid cases were rising, election chaos was being discussed, and oil was declining.

October 28 2020

Mergers & Acquisitions

Pent-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 2020

Yesterday'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 2020

Week 2: Earnings Season

Continued progress as estimates were overly pessimistic. 

October 23 2020

Pandemic Drives Mix Shift in Personal Consumption

At 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 2020

The 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 2020

Gold, an Inflation Hedge?

Reviewing the relationship between Gold and inflation over several decades shows mixed results.

October 20 2020

Growth vs. Value

Return differential exceeding two standard deviations. One of Strategas' most requested charts. 

October 19 2020

Financials 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 2020

U.S. Expensive Compared to International Equities

S&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 2020

Financials Held Captive to Level of Interest Rates

Without 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 2020

What 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 2020

Revenues Expected to be Soft 3Q

Perhaps 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 2020

2020 October Investor Survey: Results & Takeaways

The most consensus calls currently are 1) Long Tech/Growth, 2) Biden Victory, & 3) Low Rates For Longer.

October 8 2020

Materials Sector Focus

With 57% of Materials revenue derived outside of the U.S., the sector stands to benefit from a weaker dollar.

October 7 2020

Small-Caps EPS Growth Still Negative

Earnings 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 2020

No Dividend Cuts or Suspensions In September

Since the uptick of cuts and suspensions March through May, negative dividend actions have slowed significantly as business conditions begin to stabilize.

October 5 2020

Increase in High-Yield and Investment Grade Bond Issuance

U.S. corporations topping $2T in issuances so far this year. Cash on corporate balance sheets at an all-time high.

October 2 2020

Central 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 2020

2021 Could be a Year of Global Synchronized Growth

As earnings growth estimates across the world are predicted to be up double-digits and merger & acquisition activity looks poised for a rebound.

September 30 2020

Consumer Confidence is Moving Up

Despite elevated levels of unemployment and expiration of extended benefits. Also continuing troubles for small restaurants.

September 29 2020

Performance Following Elections Historically Strong

From a purely political standpoint, the markets would benefit from getting past the election.

September 28 2020

Travel Survey Points to an Uptick in Leisure Travel Desire

Likely a pent-up demand for travel in the next twelve months with families spending their summers locally.

September 25 2020

Plenty of Cash Remains On The Sidelines

There’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 2020

Housing Market Continues To Be Strong

Demand for new homes has risen because of the perceived health and safety issues with living in cities and dense urban areas.

September 23 2020

Technology Exposure Matters for Index Returns

A global phenomenon. 

September 22 2020

Equities Remain a Yield Oriented Play

Ordinarily, 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 2020

Earnings Revisions Bounced Back Strong

Perhaps 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 2020

Dividend Increases Showing Signs of Life

Though early, increasing dividend payments is a signal that business conditions may be slowly finding stable ground.

September 17 2020

Beginning to See an Uptick in Positive COVID-19 Cases

Accompanied 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 2020

August Credit Card Spend Decelerates for the First Time Since April

Likely that this trend could persist until a catalyst to stimulate consumption arrives.

September 15 2020

Technology Next 12 Months Earnings Per Share Above Pre-Covid Levels

Despite the recent pullback in the technology stocks, this is not 1999/2000.

September 14 2020

Survey: Investors Now Believe the Next 10% Move is Higher

For 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 2020

Consumer Comfort Reaches New Recovery High

Far from its pre-crisis peak though. The consumer will play a vital role for the U.S. economy to repair. 

September 10 2020

After Jumping, Small Business Delinquencies are Moving Lower

Delinquencies for small businesses continue to show signs of improvement which bodes well for Banks in the upcoming quarter.

September 9 2020

Corporations 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 2020

Permanent Job Losers Remains a Concern

Likely hindering the full recovery of the labor market despite lock downs concluding throughout the U.S.

September 4 2020

Unprecedented 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 2020

Commodity Bottom Synonymous With Dollar Top

The negative correlation has been elevated since March lows. The dollar looks slightly oversold and any rallies could correspond with commodity weakness.

September 2 2020

Dividend Cuts/Suspensions Slowing

The trend has slowed significantly, likely a function of business starting to stabilize.

September 1 2020

S&P 500 Upward Earnings Revisions Improving

As a % of total revisions. Supports the recent equity rally, but could make things challenging in coming months. 

August 31 2020

Cash on the Sidelines Still Elevated Despite Market Rally

The personal savings rate and cash in money market funds have risen to extreme levels. Potential tailwind impact to equities in the future. 

August 28 200

Stocks Outperforming Bonds

Bond 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 2020

Spread Between Top 5 and Bottom 495 Widest Ever

The six-month rate of change differential is 42%, which is even greater than what it was during the bubble. With the top 5 making up almost 24% of the index now, caution remains warranted.

August 26 2020

Future Expectations of Consumers Continue to Slide

Consumer confidence remains above where it was during the Great Financial Crisis, but yesterday marked the lowest reading since the “Great Lock-down.”

August 25 2020

S&P 500 Companies Have More Room to Cut Costs

Companies turn to cost cutting to maintain earnings. Currently, significantly less than the previous two recessions.

August 24 2020

Entering a Weak Stretch for Oil

Oil 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 2020

Bottom 495 Showing Signs of Life

A 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 2020

COVID-19 Accelerating E-Commerce Trend

The 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 2020

Consumer Discretionary Still Most Disconnected from Fundamentals

With 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 2020

REITs in a Very Challenging Environment

Significantly lagging as the pandemic accelerates the flight from urban living and working areas. 

August 17 2020

Comparing Recent P/E Expansion to the Great Financial Crisis

Charts suggest multipliers could expand even further.

August 14 2020

10-Year Yields Reach Highest Levels Since June

A 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 2020

Large-Caps Edge Out Small-Caps When Dollar Weakens

Though a weaker dollar tends to slightly favor large-caps, small-cap Earnings Per Share estimates are rising at a faster pace recently. 

August 12 2020

Valuation a Better Indicator of Long-Term Returns

Long term gains may be harder to come by and point to ~5% annualized returns over the next 10 years. 

August 11 2020

Percent of Companies Beating Estimates Tops 80%

Represents the highest reading on record based on data available back to the first quarter 1994.

August 10 2020

Mixed Government Expected to Remain Next January

Trump 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 2020

Fab Five Greater Income & Sales Growth

The 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 2020

Highest Level for Oil Since Failed OPEC+ Deal March 6th

Crude traded to its highest level as prices have been aided by economies reopening, stockpile draws, and OPEC+ production cuts. 

August 5 2020

Returns This Year Top Heavy

The 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 2020

Retail Dominates Share of Total Discretionary Bankruptcies

Is the brick-and-mortar to online shift permanently impaired these businesses, even post-crisis?

August 3 2020

S&P Upward Earnings Revisions Accelerating

Analysts revising earnings estimates higher in a “V-shaped” fashion, a development last seen after the Great Recession. 

July 31 2020

Worst Post-War GDP Print on Record

U.S. real GDP declined by -32.9% q/q annual rate in the second quarter.

July 30 2020

Emerging Markets Historically a Strong Performer When the Dollar Weakens

Returns averaged 16.6% compared to 11.5% for U.S. equities and 11.6% for Developed International shares.

July 29 2020

Drop in Consumer Expectations Bullish for Stocks

S&P 500 tends to perform better than average over the proceeding 12 months with similar magnitude changes in expectations.

July 28 2020

Technology Infrastructure a Long-Term Winner

What is less well known, is how well the data center and tower REITs fared despite the overall REIT sectors under performance.

July 27 2020

Forward Price to Earnings Nearing Tech Bubble Levels

The 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 2020

Stocks Fall Back Into Favor With Americans

As 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 2020

State and Local Government Fallout Still Widely Unknown

While 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 2020

Second Quarter Weakest for Mergers & Acquisitions Activity on Record

At only $22 billion. For comparison purposes, volumes were $73 billion during the Financial Crisis and $60 billion during the Tech Bubble. 

July 21 2020

Major Asset Class Performance Year to Date

The rally back in riskier assets has come as a surprise with the only asset class in our shortlist down significantly is oil.

July 20 2020

Real Yields Near Record Lows

10-year real yields continue to slide and are now approaching record lows.

July 17 2020

Strong Recovery in Traffic of Prospective Home Buyers

The 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 2020

A Weaker Dollar May Be Here to Stay

Companies with high foreign sales should benefit while inflation becomes a concern.

July 15 2020

Small Business Owners' Sales Expectations Recover Quickly

National Federation of Independent Business (NFIB) reports net % expecting higher sales improved 37 points to a net 13% of owners. 

July 14 2020

Earnings Season Kicks Off Today with Banks

Banks will likely provide the best clues, at least initially, on the state of the consumer.

July 13 2020

Majority of Investors Looking for Next 10% Move to be Lower

While 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 2020

Consumer Comfort for Incomes Over $100,000 Stalling

A 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 2020

Five Largest S&P Companies Continue to Gain Share

Account for 22.5% of the overall index from a market cap-perspective.

July 8 2020

Record Pace in Credit Downgrades

Standard & Poor’s made just short of 1,000 credit downgrades in the U.S. in 2Q’20 alone.

July 7 2020

Recovery Continues

Declining U.S. Dollar Index (DXY) historically good for equities. 

July 6 2020

Permanent Job Losers Rising

Forward 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 2020

Consumer Expectations Remain Elevated

Two 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 2020

Could 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 reopening

June 29 2020

Consensus Believes 2Q Will Be Trough Earnings

Skeptical 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 2020

Volatility Likely to Remain Elevated

News 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 2020

Fed's Annual Comprehensive Capital Analysis and Review Released

Sources and uses of cash under baseline and stressed economic & financial market conditions.

June 24 2020

A Tick Lower In Forward 12-Month Earnings

While one day does not make a trend, the moves lower in Technology and Health Care were unexpected. 

June 23 2020

Reminder: Market Timing is Difficult

Particularly in the current environment and the benefits of dollar-cost-averaging during downturns. 

June 22 2020

Highlighting Four Recent Topical Notes

June 19 2020

Cash Levels Just Beginning to Turn Lower

As 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 2020

Economic Surprise Index Surges

Better 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 2020

Rebound in Retail Sales Suggests Consumer Strength

Yesterday’s retail sales print came in stronger than expected at 17.7% M/M relative to a consensus estimate of 8.3%.

June 16 2020

Corporate Bond ETFs See Tremendous Inflows

Following yesterday’s announcement that the Fed would begin buying individual corporate bonds. In the second quarter, inflows of almost $42B.

June 15 2020

Google Trends Shows "Day Trading" Peaked June 9th

Important to remember, the move off of the March 23rd bottom has been strong and broad-based.

June 11 2020

Slower Economic Growth for Longer

A 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 2020

Ample Liquidity for Now

Likely 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 2020

Earnings Estimates Attempting a Bottom

While there is certainly risk that estimates turn lower again, for now, the earnings tide appears to be coming in again.

June 8 2020

Nonfarm Payroll Surprised on Friday

Surged +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 2020

Nonfarm Payroll Report Later This Morning

UPDATE: 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 2020

Rising Federal Healthcare Spending Bodes Well for Healthcare Equities

Health 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 2020

Small-Cap Debt to EBITDA at Multi-Year Highs

The 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 2020

ISM: Cautiously Optimistic

After 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 2020

Tale of Two Dollars

Strong in Asia while losing steam against the Euro. 

May 29 2020

30-Year Mortgage Rates Hit New Low

Could act as a catalyst to encourage consumers to remain engaged in the housing market despite the negative economic backdrop.

May 28 2020

Credit Spreads Narrowing

Unprecedented actions taken by the Fed to sure-up credit markets have narrowed spreads.

May 27 2020

Consumers' Future Expectations Still Elevated

Risk 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 2020

Mobility Trends Headed In The Right Direction

Driving trends have returned to the baseline levels from January of this year and walking trends are almost there.

May 21 2020

Domestic Equities Have Higher Exposure to Growth

May 20 2020

Beginning 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 2020

Front Month Crude Normalizing As Economy Reopens 

May 18 2020

Rising Food Prices Skewing Consumers' View of Prices

May 15 2020

Consumers Sentiment and Stocks Diverge

May 14 2020

Market Seasonal Choppy

May 13 2020

Small Businesses Concerned About Sales

May 12 2020

Declining Global Remittances an Issue for Emerging Markets

May 11 2020

Economic Recovery Centers on Consumers Now

May 8 2020

Non Farm Payroll Report Expected To Be Bad

May 7 2020

Grim Outlook from the Forward Curve 

May 6 2020

Bad Data Steak Continues with Non-Manufacturing Index Reading

May 5 2020

Weak Economic Data Continues with Factory Orders

May 4 2020

Supply Issues Remain

May 1 2020

April Was The Best Month For Stocks Since Jan 1987

Apr 30 2020

Largest Contraction in GDP Since 4Q'08

Apr 29 2020

Is Gold an Inflation Hedge?

Apr 28 2020

Investing With a Longer Time Horizon

Apr 27 2020

Economic Data to Watch in the Week Ahead

Apr 24 2020

Consensus Earnings Estimates Plummeting

Apr 23 2020

Small-Caps Don't Always Provide Leadership Off Lows

Apr 22 2020

Yield Curve Not a Vote of Confidence, Watching Closely

Apr 21 2020

Jet Fuel Demand Nonexistent 

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