Cocktail Investing

Tune in for the special excerpt from Episode 20 of Cocktail Investing. In this segment, Tematica Chief Macro Strategist Lenore Hawkins separates myth from reality on the oh so sexy topic . . .GDP Growth! Yes, GDP Growth can actually be an exciting topic, just have a listen and hear for yourself what Lenore has to say on the topic and the realities of what, if anything, President Trump and his policies can do to impact it.

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Tune in for the special excerpt from Episode 20 of Cocktail Investing. In this segment, Tematica Chief Investment Officer Chris Versace and Chief Macro Strategist Lenore Hawkins dig into the state of the restaurant industry, in particular, a quote from Red Robin Gourmet Burgers (RRGB) CEO who recently stated that the casual dining industry has peaked. Pretty scary for the head of one of the larger fast casual restaurant chains to basically say "it's over folks!". Tune in for this quick 5 minute overview.

In this week's program, Tematica's investing mixologists, Chris Versace and Lenore Hawkins discuss the week's economic data, relevant political events and share where they have spotted a few of the latest Thematic Signals. From Wawa embracing the Connected Society's mobile ordering like Starbucks and Panera to the rebound in HP's ink sales, as well as Jimmy Choo sharing its view on the how and why brick & mortar retail shopping has to change and why Red Robin thinks casual dining has "had its moment." Lenore and Chris break it all down and share what it means.

Tematica's mixologists also tackle the underlying assumption in President Trump's 2018 budget, react to Treasury Secretary Steve Mnuchin's call to increase the debt ceiling, share why the OPEC production cut extension is likely good for US energy companies, and dissect the latest economic data. As they do this, they dig into why they are increasingly confident GDP and earnings expectations for the back half 2017 have a greater likelihood of being reduced than upsized. As Lenore reminds us, the current expansion is long in the tooth and there are ample headwinds that could spill over the next recession even as the stock market continues to trade at more than 18x expected 2017 earnings… and yes, those earnings expectations are already starting to come down. Chris and Lenore see the risk of more negative revisions ahead as we pass the Memorial Day holiday and head into the summer months.

Companies mentioned on the Podcast

• Apple (AAPL)
• Chipotle Mexican Grill (CMG)
• Hewlett Packard (HP)
• Microsoft (MSFT)
• McDonald's (MCD)
• Nike (NKE)
• Panera Bread (PNRA)
• Red Robin Gourmet Burgers (RRGB)
• Southwest Airlines (LUVV)
• Starbucks (SBUX)
• United Airlines (UAL)
• Under Armour (UA)

Resources for this podcast:

• Chris Versace - @_ChrisVersace
• Lenore Hawkins - @EllesEconomy
• Tematica Research - https://www.tematicaresearch.com

With headlines swirling following the weekend's WannaCry attack that hit more than 200,000 computers across more than 150 countries, we're breaking with our usual format to speak with Yong-Gon Chon, CEO of cyber security company Focal Point to get his insights on that attack, and why ransomware will be THE cyber threat in 2017. Before we share that Safety & Security conversation, Tematica's investing mixologists, Chris Versace and Lenore Hawkins break down this week's economic and market data as well as the latest relevant political events.

Companies mentioned on the Podcast

• com (AMZN)
• Apple (AAPL)
• CVS Health (CVS)
• Disney (DIS)
• Facebook (FB)
• Focal Point
• JC Penny Co (JCP)
• Kohl's (KSS)
• Macy's (M)
• Microsoft (MSFT)
• Netflix (NFLX)
• Nordstrom (JWN)
• TJX Companies (TJX)
• Twitter (TWTR)
• United Parcel Service (UPS)
• Walgreens Boots Alliance (WBA)

Resources for this podcast:

• Chris Versace - @_ChrisVersace
• Lenore Hawkins - @EllesEconomy
• Tematica Research - https://www.tematicaresearch.com
• Focal Point Data Risk https://focal-point.com/about-us

In this week's program, Tematica's investing mixologists, Chris Versace and Lenore Hawkins sit down to discuss some of the week's economic data, relevant political events and share where they have spotted a few of the latest Thematic Signals. From the ongoing slaughter in brick-and-mortar retail that sits at the intersection of our Cash-strapped Consumer, Cash-less Consumption and Connected Society themes to Coca-Cola's (K) CEO blaming the Connected Society on falling soda sales volumes in the face of consumers' continual moves towards Food's with Integrity, we break down the week's news into actionable analysis while having ourselves a little fun.

More Signs of a Slowing Economy

The markets have recently been incredibly calm, with the S&P 500 moving less than 0.5 percent between the day's high and low for over two weeks, which is unprecedented over the past 30 years. Despite that calm, we are seeing more signs of a slowing economy from Markit Economics Manufacturing PMI to April's auto sales to the pain felt by traditional brick and mortar retailers. While small business optimism, as measured by the NFIB index remains high, we have been seeing it decline since January.

Despite all the talk on mainstream financial media of economic growth from rising capital expenditures, loan demand from large companies declined in Q1 by 6.9 percent while from small 8.7 percent, which doesn't jive with that capex story. Nor does the number of companies expanding their dividend payouts, like Apple (AAPL) and Exxon (XOM). It isn't just companies that are less hungry to borrow as household credit demand has contracted now for two consecutive quarters.

Is the Trump Trade Now in the Rearview Mirror?

While we are still hearing a lot about the Trump Trade, the top decile in the S&P 500 for international exposure have experienced the greatest stock price gains, while the decile with the greatest domestic exposure has performed the weakest. That doesn't fit with the narrative of a strengthening US economy when investors are preferring international revenue sources over domestic! With the S&P 500 forward P/E two standard deviations above the historical norm, it should be no surprise that from March 15th to May 3rd, investors pulled $22.2 billion out of US equity funds and added $6.7 billion to Western Europe where GDP growth has been stronger and valuations are more modest.

All Work and No Play Isn't Good for the Soul

Finally, we talk a little bit about Hawkins' new obsession, Sonos speakers, Versace angling to see Guardians of the Galaxy 2, and the dangers of opening a bag of Emily's Organics cookies!

Companies mentioned on the Podcast

• Amazon.com (AMZN)
• Apple (APPL)
• com
• Coca-Cola Bottling Company (COKE)
• Costco (COST)
• Disney (DIS)
• Emmy's Organics
• Edmunds
• Exxon Mobile (XOM)
• Facebook (FB)
• Macy's (M)
• Nordstrom (JWN)
• Snap (SNAP)
• Sonos
• Twitter (TWTR)
• United Parcel Service (UPS)
• Universal Display (OLED)

Resources for this podcast:

• Chris Versace - @_ChrisVersace
• Lenore Hawkins - @EllesEconomy
• Tematica Research - https://www.tematicaresearch.com

In this week's episode of the Cocktail Investing Podcast, Tematica's resident mixologists, Lenore Hawkins and Chris Versace, once again dig through all the earnings noise, economic data and latest policy plans spinning out of Washington to distill it down into clear investing signals.

As usual, there is a helpful amount of fun and good humor along the way as they discuss new confirming signs the economy slowed in 1Q 2017 and is starting the current quarter off on rather soft footing. Amid a frenzy of corporate earnings reports this week that includes 200 of the S&P 500 set of companies, one commonality across those reports that we've spotted is expectations for the current quarter are being dialed back. Are Chris and Lenore surprised? No, they are not, because they have been tracking both the hard and the soft economic data, as well other corroborating indicators like truck tonnage, rail traffic and other transport data.

Lenore and Chris review that data and more as well as talk about:

• Their reactions are to the Trump tax plan (that is if you call a few bullet points a plan), the recent French elections as well as the latest reading from the Atlanta Fed's GDPNow that puts 1Q 2017 GDP at just 0.2 percent;
• Why the interest rate spread between German and US treasury yields is probably not sustainable;
• Which five stocks are responsible for driving the market higher thus far in 2017? Hint - It's not Goldman Sachs (GS);
• How PepsiCo's (PEP) positive surprise vs. Coca-Cola's (KO) latest round of layoffs speaks to our Food with Integrity investing them;
• While Lenore's watching Grimm on Netflix (NFLX) and Chris is consuming Bosch on Amazon's (AMZN) Prime Video, they ponder how long until they become the next commodity business like Verizon Wireless (VZ) is today;
• How Disney (DIS) is slashing 100 on-air personalities at ESPN as it looks to position it more in line with our Connected Society investing theme;
• How stunned they were about a new report that calls for 8,600 brick & mortar stores to close in 2017 - a fourfold increase compared to 2016, and more than were closed during 2008. Look out Simon Property Group (SPG) and other mall-based REITs.

Companies Mentioned on the Podcast

• Alphabet (GOOGL)
• Amazon (AMZN)
• AT&T (T)
• Caterpillar (CAT)
• Chipotle Mexican Grill (CMG)
• Coca-Cola (KO)
• Comcast (CMCSA)
• Disney (DIS)
• Facebook (FB)
• International Flavors & fragrances (IFF)
• Microsoft (MSFT)
• Netflix (NFLX)
• PepsiCo (PEP)
• Starbucks (SBUX)
• Under Armour (UA)
• US Steel (X)
• Verizon (VZ)

Resources for this podcast:

• Chris Versace - @_ChrisVersace
• Lenore Hawkins - @EllesEconomy
• Tematica Research - https://www.tematicaresearch.com

After a one week break over Easter, Tematica's Chris Versace and Lenore Hawkins have a lot to discuss — from the recent wobbles in U.S. equities to the recent economic data that points to an economy that is nowhere near as robust as many were anticipating at the start of the year. On the podcast, they discuss:

• How economic warning signs are mounting from contraction in the auto sector to housing rolling over and office vacancies on the rise while industrial production saw 16 of 20 sub-sectors in decline in March.
• What the bond market is telling us about growth prospects.
• With the Atlanta Fed's GDPNow forecasting 0.5% growth for Q1 versus 3.4% on February 1st, this may be this first time since 1948 that the economy will have gone through an entire expansion without once seeing the four quarter trend in GDP over 5%.
• According to Bank of American Merrill Lynch, a record number of fund managers think stocks are overpriced today, and that survey goes back to 1999 — not exactly a year known for stock bargains!
• With earnings season kicking into high gear we are getting data that helps paint a more detailed picture on everything from the labor market to trends in consumer spending. With more than 2,000 companies reporting over the next two weeks, it's likely to get more than a little bumpy.
• We are seeing more and more thematic signals on Cashless Consumption from a wide range of sources with a complimentary pushing our Safety and Security theme as that Cashless Consumption process is under increasing cyber theft threat.

Companies mentioned on this podcast

• Alphabet (GOOGL)
• Amazon (AMZN)
• American Express (AXP)
• Apple (AAPL)
• Bank of America (BAC)
• Bebe Stores (BEBE)
• Citigroup (C)
• Exxon Mobil (XOM)
• Facebook (FB)
• Foot Locker (FL)
• Goldman Sachs (GS)
• IBM (IBM)
• InterContinental Hotels (IHG)
• Johnson & Johnson (JNJ)
• Kroger (KR)
• Lam Research (LRCX)
• Mastercard (MA)
• Netflix (NFLX)
• Payless Inc. (PSS)
• Proctor & Gamble (PG)
• Qualcomm (QCOM)
• Robert Half International (RHI)
• Snap-on (SNA)
• Urban Outfitters (URBN)
• Visa (V)
• Whole Foods (WFM)

Resources for this podcast:

• Chris Versace - @_ChrisVersace
• Lenore Hawkins - @EllesEconomy
• Tematica Research - https://www.tematicaresearch.com

In this week's program Tematica's cocktail mixologists, Chris Versace and Lenore Hawkins, speak with Sal Gilbertie, President, Chief Investment Office and co-founder of Teucrium Trading, who explains how individual investors can invest in agricultural commodities such as wheat, corn, soybeans and sugar through Exchange Traded Funds (ETFs) and why these types of investing vehicles are something to consider.

Following the theory of buy-what-you-know, investing in agricultural products makes sense given the exposure we all have on a daily basis. Traditionally trading commodities has only been feasible with futures, which introduces a level of complexity that many investors — professional and individual — understandably opt to avoid. However, agricultural commodities have unique attributes that we find appealing, for example, they have historically had very low correlation with the equity markets, in particular, grain commodities, which tend to move counter-cyclical to their related equities and can help stabilize an investor's overall portfolio.

One of the key takeaways from our talk with Sal is most investors tend to focus on gold and energy when contemplating commodities. When we look at it through our Scarce Resources lens, we see a wider investing landscape that includes water and yes, grains. Perhaps the biggest question coming out of our talk with Sal is, why aren't grains a part of your portfolio?

We bet after listing to this week's Cocktail Investing podcast, you'll come to the same conclusion.

Resources for this podcast

• Teucrium Trading - http://teucrium.com
• Chris Versace - @_ChrisVersace
• Lenore Hawkins - @EllesEconomy
• Tematica Research - https://www.tematicaresearch.com
• Cocktail Investing Podcast - https://www.tematicaresearch.com/cocktail-investing/

Companies mentioned on the Podcast

• Deere & Co. (DE)
• Domino's Pizza (DPZ)
• Hormel Foods (HRL)
• Pilgrim's Pride (PPC)
• Sanderson Farms (SAFM)
• Starbucks (SBUX),
• The Hershey Company (HSY)
• Tyson Foods (TSN)

Awash in March quarter data this week, Tematica Research's Chris Versace and Lenore Hawkins once again pore over all the economic and stock market noise to hone in on what's really going on and share several thematic investing signals. On the podcast you'll hear the following and much, much more:

• Our take on weaker than expected March auto sales as well as the latest income tax data and why they are confirming data points for our Cash-strapped Consumer investing theme;

• Why rising margin debt levels mixed with the stock market's current valuation is likely to make for a return in volatility as the velocity of 1Q 2017 corporate earnings reports explodes;

• How Amazon is looking to double down on our Content is King investing theme;

• Our thoughts on why Food with Integrity company Panera Bread is being acquired;

• Steps Proctor & Gamble is taking to fend off its Connected Society competitors and appeal to the Cash-strapped Consumer;

• How and why Facebook is positioning itself for Cashless Consumption in India.

Companies mentioned on this podcast

• Alphabet (GOOGL)
• Amazon (AMZN)
• American Airlines (AAL)
• Apple (AAPL)
• Bebe Stores (BEBE)
• Facebook (FB)
• Ford Motor Company (F)
• General Electric (GE)
• General Motors (GM)
• hhgregg (HGG)
• Honeywell (HON)
• Johnson & Johnson (JNJ)
• LPL Financial Holdings (LPLA)
• Kate Spade (KATE)
• Kroger (KR)
• Netflix (NFLX)
• Panera Bread (PNRA)
• Payless Inc. (PSS)
• Proctor & Gamble (PG)
• Proofpoint Inc. (PFPT)
• Qualcomm (QCOM)
• Starbucks (SBUX)
• Twitter (TWTR)
• Urban Outfitters (URBN)
• Wal-Mart (WMT)

Resources for this podcast:

• Chris Versace - @_ChrisVersace
• Lenore Hawkins - @EllesEconomy
• Tematica Research - https://www.tematicaresearch.com
• Tematica Investing -https://www.tematicaresearch.com/tematica-individual-membership/
• Elle's Economy - https://www.tematicaresearch.com/elles-economy/
• Past Cocktail Investing episodes - https://www.tematicaresearch.com/cocktail-investing/
• Monday Morning Kickoff - https://www.tematicaresearch.com/monday-morning-market-kickoff/

While Exchange Traded Funds (ETFs) have been around for about twenty years, there has been an explosion in investor appetite in recent years as ETFs investment strategies have proliferated. For example, in the first quarter of 2017 $135 billion flowed into ETFs versus just $29.6 billion in 2016, over four times the inflow in over the past year!

Tematica's resident mixologist, Chris Versace and Lenore Hawkins, discuss what's behind this and what's to come with Darek Wojnar, Head of Exchange Traded Funds at Hartford Funds. During the conversation, we talk about challenges to launching new ETFs, the differences between sustainable ETFs and those that might be "flashes in the pan", and the importance of risk assessment when not only considering an ETF, but when it's being constructed. Along the way, Darek discusses Hartford Funds newest ETFs, which focuses on something Lenore simply finds fascinating – bonds.

For the seasoned investor or new ones looking to better understand the ETF industry, this is simply a must listen.

Resources for this podcast:

Hartford Funds - https://www.hartfordfunds.com/home.html

Darek Wojnar - https://www.linkedin.com/in/darekwojnar/

Chris Versace - @_ChrisVersace

Lenore Hawkins - @EllesEconomy

Tematica Research - https://www.tematicaresearch.com