This week in the podcast, we revisit our work on investor and earnings sentiment, which we’ve been watching closely post Labor Day, offer a few thoughts on earnings season which officially got underway last week, and offer some new thoughts on supply chains. Four big things you need to know: First, individual investor sentiment may be starting to recover, after turning deeply bearish last month. Second, earnings sentiment has continued to deteriorate for the S&P 500, but may soon bottom in Industrials and Materials, supporting the idea that much of the pain from supply chain pressures may already be baked into those sectors. Third, 3Q21 reporting season is off to a good enough start in terms of the stats, and the commentary from companies has also continued to emphasize strong underlying demand. Fourth, we see other glimmers of hope – in data – on supply chains beyond the recent decline in freight costs that has captured investors' attention.

This week in the podcast, we run

through the results of our latest quarterly RBC analyst survey, in which we

poll the firm’s equity analysts on the outlooks for the industries they cover.

The big things you need to know: First, outlooks for performance over the next

6-12 months remain optimistic, driven by constructive views on fundamentals,

valuations, and cash deployment. Second, our analysts tilt most positive on

Financials, Energy, Information Technology, Utilities, and Health Care, and

least positive on REITs and Industrials. Third, policy outlooks generally

remain cool, though it’s worth noting most see higher corporate taxes as a

moderate problem for earnings and performance as opposed to a major one.

Fourth, while margin expectations have eased only a handful of our analysts

consider supply chains to be a major problem for the industries they cover.

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.