In this episode, we’re continuing to explore the state of investor sentiment by digging into the results of our late September US equity investor survey. Four big things you need to know: First, pessimists on the overall US equity market continued to rise, but remained below past highs. Second, the deterioration in the overall stock market outlook occurred alongside persistent valuation concerns, and deteriorating margin expectations, as well as slipping optimism on cash deployment and the economy. Third, on the hot topics in the market, investors are most concerned about China, geopolitical risk, and monetary policy. Fourth, investors are still leaning into select parts of the reflation trade.

This week in the podcast, we discuss the latest developments in investor and earnings sentiment, which we’ve been keeping a close eye on this month, as well as a few thoughts on the rotation out of growth we’ve been seeing this week.

Three big things you need to know.  First, institutional investor positioning has finally taken a hit.  Second, earnings sentiment has continued to deteriorate, driven by cyclicals and supply chain concerns, but so far the damage has been concentrated in a few sectors. Third, we think there’s more to the rotation out of Growth this week than higher bond yields, but regardless this rotation has become another catalyst for downside in the US equity market in the near-term. Our bottom line, as we think across all of these issues, is that the volatility we’ve been in as regards to the broader US equity market likely isn’t done yet.

This week in the podcast, we tackle three topics: investor sentiment, earnings sentiment, and supply chains.

Three big things you need to know: (1) First, individual investor sentiment has fallen so hard recently, it may soon send a contrarian buy signal. (2) Second, earnings sentiment has started to deteriorate, led by Cyclicals, but Secular Growth has stayed resilient. (3) Third, we highlight what we’re watching on supply chains -- specifically, the rate of change in freight costs, global COVID trends, and regional Fed surveys -- where we are seeing some faint glimmers of hope.

In this episode, we update our thoughts on the broader US equity market outlook. Three big things you need to know: (1) First, we are lifting our 2021 EPS forecast and price target by ~4%, and lifting our 2022 EPS forecast by ~3%, while also introducing our S&P 500 price target for 2022 which calls for a 9% annual gain. (2) Second, we continue to see risk of a pullback in the S&P 500 before year-end, but view it as a buying opportunity. (3) Third, one key risk that we are monitoring for the stock market – and our call – is the possibility that S&P 500 EPS growth will turn negative in early 2022.

This week in the podcast, guest

host Sara Mahaffy, RBC’s ESG Strategist, runs through the team’s latest work on

sustainable fund flows, ESG themes in focus, and trends in new sustainable fund

launches.

This week in the podcast, we provide an end of summer

update on our earnings transcript review and the high frequency economic,

sentiment, and virus indicators that we track. We also offer a few thoughts on

what tapering means for US equity markets. Three big things you need to know:

(1) Last week’s earnings calls provided an important reminder about the

strength of the consumer. (2) The reflation trades remain tethered to COVID

trends. (3) We think equity investors have already priced in tapering to a

significant degree, given the underperformance of Value and Small Cap that we

saw earlier this summer.

In this week’s podcast, we take a closer look at the recent impact of the COVID backdrop on the US equity market. The three big things you need to know: (1) First, COVID has taken up more airtime on earnings calls in August, and the tone on the variant has been fairly mixed. (2) Second, we’re seeing more pronounced signs of stress in the high-frequency indicators that we track. (3) Third, for the most part, the US equity market has remained forward-looking, focusing not on the impacts of the latest surge but rather on the continuation of the recovery thereafter.

This week in the podcast we run

through our latest thoughts on positioning within the US equity market with an

eye on longer-term trends through 2022, which has been the focus of our

conversations with investors in recent weeks. The big things you need to know:

1) We expect the Growth/Value trade to stay choppy through 2022. Once current

pressures on the Value trade resolve (primarily COVID and growth concerns), we

see another significant outperformance trade in Value in the intermediate term,

but suspect that will end up being the time to exit the trade. (2) As we start

to get ready for 2022 outlook discussions, we are getting more balanced between

Value/Cyclicals and Growth in our S&P 500 sector overweights. Our

Financials and Energy overweights remain, but we are lowering Materials from

overweight to market weight. We are also lifting Tech to overweight from market

weight. (3) High quality leadership has returned to the US equity market,

supporting our upgrade of Large Cap Tech.

This week in the podcast

(1) Most of the major trends and themes for 2Q reporting season that we’ve been

highlighting over the past few weeks remained intact. (2) We learned four new,

important things last week on slowing growth rates, supply chains, labor, and

COVID/mobility. (3) It’s not unusual for slowing growth rates to trip up the

stock market temporarily following recessions. (4) The high-frequency data we

track suggest mobility trends remain constructive.

This week in the podcast we take a

look at what we learned in the second full week of 2Q21 reporting season. Three

big things you need to know: First, the overall tone from management teams

improved in week 2 relative to week 1, with a focus on the strong demand and

cash deployment backdrop, increased confidence on the 2nd half, and COVID

concerns toned down. Second, while we generally sensed a better tone regarding

the ability of companies to manage through margin pressures, we also came away

with the impression that management teams are inclined to see general

inflationary and supply chain pressures as enduring for a bit longer. Third,

while upward earnings revisions are still happening, we continue to see a

softening in earnings sentiment driven by deterioration in Financials, Consumer

Staples, Health Care, and Utilities specifically and Value, Defensives, and

Cyclicals more broadly.