Cocktail Investing Ep. 7  – Crude Tumbles, Jobs, Inflation and the Fed as More People Stop Fighting Obesity? Say What?

Cocktail Investing Ep. 7  – Crude Tumbles, Jobs, Inflation and the Fed as More People Stop Fighting Obesity? Say What?

In this episode of Cocktail Investing, Tematica Research’s resident mixologists Chris Versace and Lenore Hawkins not only recap, but also scrutinize the rash of conflicting economic data that has put a pause in the stock market’s move higher. Some data points to an improving economy, while others have led the Atlanta Fed to dramatically cut its GDP forecast for the current quarter.

Chris and Lenore tackle the factors behind that as well as other impediments that are likely to keep the US economy rangebound over the coming quarters. They also share their views on the upcoming economic data points the Fed is likely to focus on as it decides if it should boost interest rates this month.

 

Some Thematic Signals You Might Wish to Forget

As we like to say here at Tematica, one needs to dig below the headline to see what is really going on. As one does that, context and perspective are key to put the data puzzle pieces together in a cohesive manner to get a clear signal lest one be even more confused by all the noise. In our view, there is no better way to do that than with our thematic perspective, which means we are not following the herd and using the same tired sector based approach. You’ll hear some examples when Chris and Lenore share some thematic signals for Tematica’s Fattening of the Consumer, Rise & Fall of the Middle Class and Disruptive Technologies investing themes. After you’re done, you may think twice about meatless protein and perhaps you’ll sign up for a virtual reality lesson on how to re-tile your shower.

 

Companies mentioned on the Podcast
  • ADP (ADP)
  • Amazon (AMZN)
  • Chevron  (CVX)
  • Energy Select Sector SPDR ETF (XLE)
  • Exxon Mobil (XOM)
  • Express Inc. (EXPR)
  • JC Penney (JCP)
  • J. Jill Group (JILL)
  • Lowe’s Companies (LOW)
  • Kohl’s (KSS)
  • Macy’s (M)
  • RadioShack Corp. (RSH)
  • Royal Dutch Shell (RDS.A)
  • Snap Inc. (SNAP)
  • Swift Transportation (SWFT)
  • Tyson Foods (TSN)
  • Weight Watchers (WTW)

 

 

Chris Versace Tematica Research Founder and Chief Investment Officer
Lenore Hawkins Tematica Research Chief Macro Strategist
Cocktail Investing Ep 6: The growing divide between the hard & the soft economic reports, boxed.com CEO Chieh Huang

Cocktail Investing Ep 6: The growing divide between the hard & the soft economic reports, boxed.com CEO Chieh Huang

In this week’s program, Tematica’s cocktail mixologists, Chris Versace and Lenore Hawkins talk about everything from the market’s reaction to Trump’s speech before Congress to the widening divide between the real hard economic data reports coming in, (spoiler alert – not so hot) and the softer sentiment reports which are on fire, as well as the latest Thematic Signals. From mobile carriers moving more and more into content in our Connected Society in which Content is King to McDonald’s experimenting with different delivery models for our Cash Strapped Consumer who is eschewing quick service restaurants, preferring Foods with Integrity.

This week we saw the wind down to the December quarter earnings season, Trump’s first speech before Congress and Amazon Web Services wreaked havoc on businesses far and wide when it went down. Snap, the parent company of Snapchat, traded publicly for the first time and despite iffy fundamentals, the share price jumped up dramatically.

January’s real personal income growth weakened materially while real spending growth was the weakest since 2009 – not exactly consistent with the jubilant headlines. It also raises questions for our consumer spending led economy. With signs of inflation picking up both in and outside the US per February data from Markit Economics and ISM, the Fed is looking more like it will hike in March, despite their recent Beige book being full of terms like “modest”, “moderate”, “mixed” and subdued” – go figure.

McDonald’s is looking to offer mobile ordering alongside curbside pickup as it experiences declining foot traffic and same store sales. As we share on the podcast, we think embracing technology is not going to get at the heart of McDonald’s problems.

Mobile carriers are finding more and more they need to feed their networks with content as more than 80 percent of 18 to 34-year-olds in the U.S. use mobile platforms to consume content, spending more than two hours on average every day viewing videos or using apps. We think this is bound to result in a boom for the eye-glass and contact lens industry in a few years time – we’re only half kidding.

If that all wasn’t enough, we had the great pleasure of speaking with Chieh Huang, CEO of our latest online shopping obsession, Boxed.com. In just four years Chieh and his team have grown the business from operating out of Chieh’s garage to now generating over $100 million in revenue while getting their products to 96 percent of their customers in just two days or less. We spoke with him about just how his team has generated such stellar growth and his insights into the incredible level of pain we see in the retail sector. We couldn’t have enjoyed ourselves more talking with a guy who is deep in the thick of a Disruptive Technology with a compelling offering for the Cash Strapped Consumer in our Connected Society.

Companies mentioned on the Podcast

  • ALDI
  • Amazon.com (AMZN)
  • Apple (APPL)
  • AT&T (T)
  • Boeing (BA)
  • Comcast (CMCSA)
  • Costco (COST)
  • Dycom (DY)
  • Goldman Sachs (GS)
  • Facebook (FB)
  • Lidl
  • McDonald’s (MCD)
  • Snap (SNAP)
  • United Parcel Service (UPS)
  • Verizon (VZ)
  • Walmart (WMT)
  • Wegmans Food Markets

 

Chris Versace Tematica Research Founder and Chief Investment Officer
Lenore Hawkins Tematica Research Chief Macro Strategist
Cocktail Investing Ep 5: M&A activity among Consumer Staples, fast food thematic signals, Fed-Speak, and what exactly is the Border Adjustment Tax (BAT)?

Cocktail Investing Ep 5: M&A activity among Consumer Staples, fast food thematic signals, Fed-Speak, and what exactly is the Border Adjustment Tax (BAT)?

In this week’s program, Tematica’s cocktail 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, such as:

  • What McDonald’s (MCD) soft drink promotional price cuts mean to our Cash Strapped Consumer
  • How the Connected Society is pushing UPS to up its game as online shoppers increasingly expect two-day shipping.
  • Major League Baseball looks to remain relevant in our Content is King world by potentially partnering with Facebook (FB), which in turn is placing its app on Apple TV (AAPL), as the way we consume content and connect with each other continues to evolve.

This week saw some telling moves in the M&A arena with Kraft (KHC) calling off its prematurely disclosed bid for Unilever (UL) as consumer staples companies such as JM Smucker (SJM) and General Mills (GIS) struggle — not exactly a robust sign for the economy despite what we see in the headlines. Others like Restaurant Brands (QSR) that are looking to buy growth get an agreement done with Popeye’s Louisiana Kitchen (PLKI), and we talk about the whys behind that strategic rationale.

Of course, this week we received the clear-as-mud minutes from the latest Federal Reserve’s Open Market Committee meeting, which we dig into as well as dish out the 411 on what this Border Adjustment Tax is all about and how it could affect you and the companies in which you invest.

The teflon market continues to push up as valuations get further into the stratosphere and forward EPS estimates get revised downward. We’ve now gone an unprecedented 8 years without a 20 percent correction and the VIX 65-day moving average has dropped down into territory that normally precedes a pullback. While we are optimistic when it comes to the economy, we have to acknowledge our Aging of the Population theme means the first baby boomers are turning 70 this year with 1.5 million doing so each year over the next 15 years, which will have a dramatic impact on spending as well as health care costs. That’s especially the case when only 50% of them have saved enough for retirement.

But with CEO’s of major U.S. manufacturers making the headlines that Trump is the most pro-business president since the founding fathers, stocks are holding up just fine… for now. More on that on the podcast. Listen now.

Companies mentioned on the Podcast

  • Amazon.com (AMZN)
  • Apple (APPL)
  • Campbell Soup (CPB)
  • Facebook (FB)
  • General Mills (GIS)
  • Houlihan Lokey (HLI)
  • JM Smucker (SJM)
  • Kraft Heinz (KHC)
  • Macy’s (M)
  • Major League Baseball
  • McDonald’s (MCD)
  • Nordstrom (JWN)
  • Popeyes Louisiana Kitchen (PLKI)
  • Restaurant Brands Intl (QSR)
  • Twitter (TWTR)
  • Unilever (UL)
  • United Parcel Service (UPS)
  • Whole Foods Market (WFM)

 

Lenore Hawkins Tematica Research Chief Macro Strategist
Chris Versace Tematica Research Founder and Chief Investment Officer