Today in the podcast, a refresh of our 2023 outlook. The three big things you need to know: First, we’re sticking with our 4,100 YE 2023 S&P 500 target. We continue to view 2023 as another year of messy post-crisis normalization, similar to the 2010-2011 and 2002-2003 periods. Second, we see a relatively balanced risk/reward between Growth and Value for the balance of the year, though Growth is likely to bear the brunt of renewed inflation/Fed fears in the very near-term. Third, we continue to prefer Small Caps to Large Caps, though we admit that the setup for Small Caps is less compelling than it was last July when we turned overweight Small Caps.

This week in the podcast, three big things you need to know: First, we see the drama in DC over the debt ceiling as a potential risk to keep an eye on for US equities later this year. Second, mixed messages persisted in last week’s earnings calls, with a slightly more positive tone than the prior week. Third, the rebound underway in investor sentiment, which has helped stocks stay resilient, still appears to be middle innings.

This week in the podcast, we reflect on the most interesting question we received last week, and our latest thoughts on earnings. Three big things you need to know today: First, low quality leadership has returned, something that’s normal after recession lows have been put in. Second, macro themes were muddled in last week’s S&P 500 earnings calls helping explain why the rally has stumbled a bit. Third, earnings related data points continue to highlight near-term softening at the same time that a case for an earnings recovery in 2024 is emerging, highlighting the conflicting cross currents equities are grappling with.

This week in the podcast, we touch on hot topics and interesting things that jumped out in our inbound client questions and high frequency indicators. Four big things you need to know: First, recent sector leadership within the S&P 500 is consistent with what we’ve seen in the past after final Fed rate hikes. Second, we continue to find that investors are interested in debating what kind of P/E multiple the S&P 500 deserves in light of current interest rate and inflation assumptions. With this in mind, we’ve refreshed our valuation model which makes the case for valuation expansion as inflation moderates. Third, earnings revisions trends are getting less negative for most S&P 500 sectors, suggesting that sentiment around earnings is improving at the margin, helping explain why the stock market has surged despite estimates continuing to fall in dollar terms. Fourth, we highlight what jumped out from our high frequency indicators last week. Correlations within the S&P 500 and Russell 2000 are falling, and the most popular stocks in hedge funds are outperforming – positive data points for stock pickers and broader US equity market returns.

This week in the podcast, we highlight the most interesting question we got last week, some thoughts on earnings, and updates on our high frequency indicators. Three big things you need to know: 

• First, layoffs for Tech are spiking, a necessary step in the bottoming process for the stock market, while industrial layoffs remain low, supporting the soft landing thesis.
• Second, as we combed through the earnings data, a case for stocks may be starting to emerge on 2024 EPS.
• Third, we review what jumped out the most on our high frequency indicators last week in terms of sentiment, valuation, and performance, which generally supports the soft landing thesis and suggest that last week’s strong move in US equities was justified.

Today in the podcast, we reflect on hot topics and some of the most interesting things we saw and heard last week for the early reporters and our high frequency indicators. Three big things you need to know: First, the S&P 500 earnings backdrop has continued to soften, a problem for stocks in the very near term. Second, we review key themes we’ve been seeing and reading in our transcript review – which make the case for some near-term indigestion in the market. Third, we run through key developments in our high frequency indicators – which generally tilt positive and add to our conviction that any near-term indigestion in stocks from earnings will be temporary.

Two big things you need to know: First, 2023 EPS forecasts have continued to soften, with former leadership sectors like Energy finally taking their lumps by participating in the downward revision cycle. Second, S&P 500 stocks with high international revenue exposure have been outperforming domestically oriented companies, as their earnings revisions trends have improved at the same time earnings revisions trends for the domestic bucket (another former leader on performance until recently) have finally started to deteriorate.

Today in the podcast, we run through some of the most interesting questions we got from US equity investors last week as 2023 got underway. Four big things you need to know: First, we’ve seen the most discussion about this year’s tax policy changes from Industrials, Financials, Energy and Utilities. Second, the three major growth/TIMT centric sectors account for almost all of the S&P 500’s decline in 2022, but the Tech sector is still a positive contributor to the index on a 3 year basis. Third, the malaise in Tech and leadership by defensive sectors may persist until the market starts to sense that a bottom in ISM manufacturing is close. Fourth, Small Caps are off to a solid start to the year. We think that will continue despite last week’s downtick in ISM manufacturing.

Three big things you need to know:  First, our analysts have a slightly positive tilt in their outlooks for performance over the next 6-12 months, as well as on other hot topics. Second, on our survey our analysts were most constructive on the performance outlooks for Health Care and Energy, followed by Tech, Utilities, and REITs, with the weakest outlooks for Consumer Staples, Industrials, and Consumer Discretionary. Third, in terms of our own US equity strategy sector recommendations, which leverages our analysts’ views as well as our own tools, we are overweight Energy, Financials, Health Care, Utilities, and Technology, and underweight Consumer Staples and Consumer Discretionary.

Today in the podcast, we reflect on hot topics and some of the most interesting things we saw and heard last week. Three big things you need to know: First, we run through the main topics in our conversations with European based equity investors last week. Second, expensive US valuations relative to Europe are another problem for the US equity outlook in 2023. Third, we highlight initial thoughts on potential sector beneficiaries of a weaker US Dollar and China reopening.