And Now for February Retail Sales and PPI
And Now for February Retail Sales and PPI
Will the data support a cautious message from the Fed next week?
We have a big morning of economic data with the Retail Sales and Producer Price Index both being published ahead of the market open.
Headline retail sales are expected to rebound, rising 0.8% compared to January after that month’s nearly 1.0% drop. Excluding auto sales, the market sees February Retail Sales up 0.5%.
The headline Producer Price Index (PPI) for February is also expected to climb, rising 1.1% YoY compared to January’s 0.9% move. Helping fuel that expectation is the rebound in energy prices and as many consumers know those at the gas pump. The market’s take on Core PPI is for it to inch lower to 1.9% YoY, down from 2.0% the month before, but so far, the majority of February inflation data and comments moved in a different direction.
Should we see that trend continue with this morning’s PPI figures, both for headline and core, it would be another reason for the Fed to have a more cautious tone when it comes to rate cuts following next week’s policy meeting.
For more, be sure to read our Daily Markets column published each day by Nasdaq.
Model Musings
Homebuilding & Materials
On this edition of TheStreet Pro Podcast, Chris Versace is joined by Peter Jackson, CFO of Builders FirstSource (BLDR). The conversation starts with some thoughts on the domestic housing market, which accounts for more than 80% of Builders' business mix, and turns quickly to the single-family housing market. That economic engine drives roughly 70% of the company's business and Builders sees it rising in the mid-single digits. The discussion then shifts to the expanding and higher-margin Value Add business and how that ties into the company’s digital strategy, one that aims to reduce pain points for homebuilders ranging from large public companies to smaller, regional players, and a growing dollar share for Builders.
Luxury Buying Boom
“Is Accessible Luxury the Next Big Opportunity in India? Spurred by rapid growth in the pure luxury market, global brands operating in lower-priced segments like contemporary fashion are entering the country or accelerating expansion plans.” Read more here
“Global beauty companies faced a challenging environment in China last year as Estée Lauder Companies, L'Oréal Group, Shiseido and Procter & Gamble were among those reporting year-over-year sales decreases. But there were some bright spots: brands that persevered against adverse macroeconomic conditions included C-beauty labels such as Proya and international standouts like L'Oréal Paris.” Read more here
Nuclear Energy & Uranium
“In a lab more than two stories underground, a UAlbany professor has taken the first steps toward what he says is a safer form of nuclear energy: One that doesn’t ever explode, melt down or emit harmful radiation for millennia.” Read more here
“Hollywood’s “Oppenheimer” dominated at the Oscars — renewing calls for reducing the threat of nuclear weapons worldwide — but a different kind of nuclear energy is gaining momentum in Washington. Freshly passed legislation and new rules from the Biden administration are putting teeth behind a renewed bipartisan push for nuclear power…” Read more here
The Strategies Behind Our Thematic Models
Aging of the Population - Capturing the demographic wave of the aging population and the changing demands it brings with it.
Artificial Intelligence – Software, chips, and related companies that facilitate the collection and analysis of large data sets and autonomous generation of solutions given non-machine language prompts.
CHIPs Act – Capturing the reshoring of the US semiconductor industry and the $52.7 billion poised to be spent on semiconductor manufacturing.
Cloud Computing – Companies that provide hardware and services that enhance the cloud computing experience for users, such as co-location, security, and edge computing.
Consumer Inflation Fighters - Companies poised to benefit as consumers stretch the disposable spending dollars they do have.
Core Holdings – Companies that reflect economic activity and are large enough to not get pushed around by day-to-day market trends. Low-beta, large-cap names able to better withstand economic turmoil.
Digital Infrastructure & Connectivity -The buildout and upgrading of our Networks, Data Storage Facilities, and Equipment.
Data Privacy & Digital Identity - Companies providing the tools and services that verify authorized users and safeguard personal data privacy.
EPS Diplomats - Profitable large capitalization companies proven to produce above-average EPS growth and provide investors with the benefit of multiple expansion.
EV Transition - Capturing the transition to EVs and related infrastructure from combustion engine vehicles.
Guilty Pleasure – Companies that produce/provide food and drink products that consumers tend to enjoy regardless of the economic environment and potential long-term health hazards associated with excessive consumption.
Homebuilding & Materials – Ranging from homebuilders to key building product companies that serve the housing market, this model looks to capture the rising demand for housing, one that should benefit as the Fed returns monetary policy to more normalized levels.
Market Hedge Model – This basket of daily reset swap-based broad market inverse ETFs protects in the face of market pullbacks, overbought market technicals, and other drivers of market volatility.
Luxury Buying Boom - Tapping into aspirational buying and affluent buyers amid rising global wealth.
Market Hedge Model – This basket of daily reset swap-based broad market inverse ETFs protects in the face of market pullbacks, overbought market technicals, and other drivers of market volatility.
Nuclear Energy & Uranium – Companies that either build and maintain nuclear power plants or are involved in the production of uranium.
Precision Ag & Agri Science – Companies that look to address shrinking arable land by helping maximize crop yields utilizing technology, science, or both.
Rebuilding America - Turning the focused spending on rebuilding US infrastructure into revenue and profits.
Safety & Security – Targeted exposure to companies that provide goods and services primarily to the Defense and security sectors of the economy.
Space Economy – Companies that focus on the launch and operation of satellite networks.
The strategies behind our Dividend Income Models:
Monthly Dividend Model – Pretty much what the name says – this model invests in companies that pay monthly dividends to shareholders.
ETF Dividend Model – High-yielding ETFs that provide a range of exposures from domestic equities, international equities, emerging market equities, MLPS, and REITs.
ETF Enhanced Dividend Model – A group of high-yielding ETFs that utilize options to enhance yield through collecting option income.
Don’t be a stranger
Thanks for reading and if you have a suggestion for an article or book we should read, or a stream we should catch, email us at info@tematicaresearch.com. The same email works if you want to know more about our thematic and targeted exposure models listed below.