Last Week's Signals and Model Confirmation Points
Examining recent targeted exposure model confirmation points
We’re back with a fresh set of ripped from the headlines confirmation points and signals for not only our targeted exposure and thematic strategies, but also our Digital Infrastructure & Connectivity model and the AI & Data Center Model Suite.
Feast away!
Aging Population
A national network of primary care clinics focused exclusively on seniors is expanding rapidly into Greater Cleveland, offering a model of health care that rewards prevention over procedures. Read more here
The Philippines is entering a demographic juncture as slowing population growth coincides with a rising number of working-age and dependent individuals, a senior official said this week… Statistics authority projections show the population aged 65 and older will comprise 7 percent of the total by 2030, the threshold at which demographers classify a country as “aging.” By contrast, countries such as Japan and South Korea have already become “super-aged” societies, with more than 20 percent of their populations aged 65 and above. Unlike those nations, the Philippines lags in health, education, and social infrastructure compared to its East Asian peers. Read more here
Artificial Intelligence
Artificial intelligence is changing how many people work. In several Twin Cities area police departments, it’s taking on some of the paperwork that comes with law enforcement by helping write police reports. Axon, the company behind Taser, has an AI tool that helps officers write reports using body camera footage. The tool is called Draft One. As KSTP first reported, three departments in the metro are using it. Read more here
Key trends highlight how travel is becoming more intentional and technology-driven. For example, searches for “golf & spa resorts” and “ski & spa” packages grew by 300% and 250% year-over-year, reflecting demand for wellness blends. Meanwhile, cultural immersion is rising, with searches for “Japanese tea ceremonies” increasing 53%. Social media and livestreams also influence bookings—over 75% of travelers in Thailand, Indonesia, and India watch travel livestreams, with many booking directly via links. In addition, AI is becoming a travel “co-pilot”: searches for “Help planning my trip” rose 190% as tools like Google’s Gemini assist in planning. Read more here
Equifax on Thursday (Oct. 16) launched Equifax Ignite AI Advisor, a generative AI solution that helps lenders analyze portfolio performance, identify growth opportunities, and improve decision making through conversational data insights… Built on the Equifax Cloud and powered by its Amplify AI engine, the tool merges lenders’ internal data with Equifax’s proprietary credit and risk analytics. It allows financial institutions of all sizes to interact with data through natural language queries and visual dashboards, without requiring advanced technical expertise or dedicated data science teams. Read more here
BNY increased the number of artificial intelligence (AI) solutions deployed throughout the company by 75% during the third quarter. The bank now has 117 AI solutions in production and more than 100 AI agents in use, BNY CEO Robin Vince said Thursday (Oct. 16) ... The 117 AI solutions in production help with tasks like identifying new business leads, writing code, automating payment processing, accelerating client onboarding and increasing automation of reconciliation, Vince said. Read more here
Google said its open-source Gemma AI model helped scientists identify a potential new biological pathway for cancer therapy, according to a release by Google. The company said the finding demonstrates how smaller, open models can play a role in high-impact scientific research typically dominated by large, proprietary systems. The effort also marks one of Google’s most concrete applications of open-weight AI in healthcare to date. Read more here
Cash-Strapped Consumer
Inflation in the grocery aisle is picking up, and stinging consumers. Consumers said they are cutting back on purchases, stockpiling certain foods or exploring more-affordable stores… Albertsons Chief Executive Susan Morris said on a Tuesday earnings call that shoppers were choosing smaller package sizes and using more coupons to reduce their grocery bills. She said the supermarket company is looking to cut costs to help counter inflation. Read more here
A nontraditional economic indicator, sales of the corrugated cardboard used to make the boxes that transport everything from doughnuts to dishwashers are slumping, signaling that retail demand across industries may be due for its own correction in the not-too-distant future. US box shipments—that is, volumes of empty packaging materials sold to retailers, which in turn use them to ship orders to warehouses, storefronts and Americans’ doorsteps—fell to the lowest second-quarter reading since 2015, according to data from Fibre Box Association… Read more here
To afford an automobile, more consumers, especially lower-income families, have resorted to buying used cars and taking out longer loans. Now, more are falling behind on their loans, signaling that lower-income consumers are struggling to afford payments as wages stagnate and unemployment ticks higher. While the economy has remained strong, and Wall Street has kept buying subprime auto loans, the auto market is evidence that not all is well under the hood. The percentage of new-car buyers with credit scores below 650 was nearly 14% in September, roughly one in seven people, J.D. Power said last month. That is the highest for the comparable period since 2016. Read more here
What was once a stopgap for hard times is fast becoming a fixture of American financial planning. According to a new PYMNTS Intelligence report, “Do the (Side) Hustle: Four in 10 U.S. Consumers Seize the Opportunity to Earn More Income,” side hustles now make up nearly half of the income for many who pursue them — a sign that supplemental work has evolved from a fringe phenomenon into a defining feature of the modern economy. Read more here
Cybersecurity, Data Privacy & Digital Identity
North Korean hackers have adopted the ‘EtherHiding’ technique that leverages smart contracts to host and deliver malware in social engineering campaigns that steal cryptocurrency. Google Threat Intelligence Group (GTIG) says that a DPRK nation state threat actor, tracked internally as UNC5342, has been employing EtherHiding since February in Contagious Interview operations. Read more here
The Information Commissioner’s Office (ICO) in the UK has fined Capita, a provider of data-driven business process services, £14 million ($18.7 million) for a data breach incident in 2023 that exposed the personal information of 6.6 million people. Capita is a major UK-based outsourcing and professional services company that provides consulting, digital, and software services to local councils, the NHS, the Ministry of Defense, and organizations in the banking, utilities, and telecommunications sectors. Read more here
Spanish fashion retailer MANGO is sending notices of a data breach to its customers, warning that its marketing vendor suffered a compromise exposing personal data. Read more here
Digital Infrastructure
The rapid growth of artificial intelligence will require about $7 trillion of capital – equivalent to about a quarter of U.S. gross domestic product… We estimate about $7 trillion. That’s a large number,” said Hadley Peer Marshal, chief financial officer at Brookfield Asset Management, in a Bloomberg interview. “That’s going to bring about $10 trillion of productivity on an annual basis.” The company estimates that to match demand over the next decade, about $2 trillion needs to go towards “AI factories,” $4 trillion needs to go on computing infrastructure, while $500 billion needs to go on “power and transmission” and “strategic adjacencies,” Read more here
After two consecutive years of declining telecom equipment investments, the pendulum is beginning to shift. Preliminary findings indicate that aggregate worldwide telecom equipment revenues across the six programs tracked by Dell’Oro Group — Broadband Access, Microwave & Optical Transport, Mobile Core Network (MCN), Radio Access Network (RAN), and Service Provider Router & Switch — increased by 4% year over year (Y/Y) in 1H25… The analyst team now expects global telecom equipment revenues across the six programs to grow 2% to 3% in 2025, compared with a flat outlook in the 2024 update. Read more here
While some analysts have raised concerns about circular financing deals such as that struck between ChatGPT-developer OpenAI and Nvidia creating the risk of a bubble in AI investment, TSMC shrugged off such worries and said demand was growing exponentially. “Our conviction in the megatrend is strengthening and we believe the demand for semiconductors will continue to be very fundamental as a key enabler of AI applications,” Read more here
Oracle’s new dual chief executives defended the company’s massive new investment in data centers, saying it will offer computing firepower and a suite of bundled services that will make artificial intelligence useful for businesses. Read more here
Digital Lifestyle
Netflix wants to be more than just what you watch this holiday season. It wants to be your game night host, too. Rolling out soon to the Games tab on smart TVs, a new batch of party games will let you skip the console, grab your phone, and dive right into group play. With nothing more than your Netflix account and a screen, you’ll be able to jump into fast, funny, and competitive multiplayer games that bring the couch back to life. Read more here
In a sweeping strategic shift, Disney has discontinued its iconic Disney Channel and related linear TV networks in more than 20 countries since 2019, redirecting its focus to the booming streaming platform, Disney+. The closures, driven by declining viewership, expiring broadcast contracts, and a global push toward on-demand content, mark a significant transformation for the entertainment giant. Read more here
Homebuilding & Materials
Mortgage applications for new homes dipped 5% in September from August but increased 2% compared to last year. Despite more inventory and lower rates, demand slowed due to a weakening labor market. Read more here
The U.S. is still very much in a housing shortage, but builders have a lot of homes they are trying to sell as they face slower buyer demand, higher costs, and the threat of more tariffs. Read more here
The housing market recovery is underway, but it’s just beginning and will take time, according to a recent First American report. The revival is being driven largely by buyers undergoing such life events as marriage, child birth, divorce and death… Read more here
Safety & Security
Honolulu police officers could soon be using artificial intelligence to help write reports, a move that the department says could free up cops to spend more time patrolling their beats, but critics say could damage the integrity of the state’s criminal justice system. Read more here
Mr. Trump has seemingly stewed for weeks over Spain’s refusal, alone among NATO partners, to increase military spending to 5 percent of G.D.P., as he demanded. Last week, he called Spain a “laggard” and suggested that partners “throw them out of NATO.” Then on Monday, he urged European leaders to get “working” on Spain, and on Tuesday, he added his own pressure, threatening to single out the country for higher tariffs than the rest of the E.U. Read more here
For decades, Japan’s U.S.-imposed constitution has limited its military capabilities, and the country spent meager amounts on defense. Yet Japan has undergone a quiet revolution. The country is dramatically increasing defense spending and having a robust debate about whether to amend the “pacifist clause” of its constitution. Most of the country’s political parties, following public opinion, broadly support the shift from meek self-defense to more active deterrence. Read more here
Denmark will buy 16 additional F-35 jets, invest in air defenses and maritime patrol aircraft and add to its fleet of Arctic-ready patrol vessels as part of a military spending package through to 2033 worth 88 billion Danish kroner ($13.7 billion), the government said. Read more here
European Union leaders backed plans on Wednesday to bolster the bloc’s defences against Russian drones as they met in Copenhagen days after airspace intrusions by unmanned aircraft, opens new tab rattled Denmark… “We need to strengthen our production of drones, of anti-drone capabilities, and this includes building up a European network of anti-drone measures that can protect and, of course, also neutralize intrusion from outside.” Read more here
A federal judge on Thursday said she planned to order federal agents engaged in Homeland Security’s “Operation Midway Blitz” immigration enforcement push in Chicagoland to wear and use body-worn cameras while engaged in enforcement activities or interacting with protesters. Read more here
Police and sheriff’s departments across America are using AI-powered drones for pursuits, investigations and emergencies — even delivering Narcan to stop overdose deaths… Local law enforcement agencies are facing chronic staffing shortages amid pressures to reduce violent crime. AI-powered drones can do some police work — but using them raises new questions about surveillance and privacy. 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.
Cash Strapped Consumers - Companies poised to benefit as consumers stretch the disposable spending dollars they do have.
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.
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.
Cybersecurity - Companies that focus on protecting against the penetration of digital networks and the theft, ransom, corruption, or destruction of data.
Data Privacy & Digital Identity - Companies providing the tools and services that verify authorized users and safeguard personal data privacy.
Digital Infrastructure & Connectivity - Companies that are integral to the development and the buildout of the infrastructure that supports our increasingly connected world.
Digital Lifestyle - The companies behind our increasingly connected lives.
Digital Payments - Companies benefitting from the accelerating structural adoption of digital payments and financial technology (FinTech).
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.
Nuclear Energy & Uranium – Companies that either build and maintain nuclear power plants or are involved in the production of uranium.
Luxury Buying Boom - Tapping into aspirational buying and affluent buyers amid rising global wealth.
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 indicates – 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 above.