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RBC's Markets in Motion
6 minutes | Oct 26, 2021
Individual Investors Bounce Back, As Earnings Season Ramps Up
This week in the podcast, we review our latest thoughts on investor sentiment and 3Q21 earnings season. The big things you need to know: First, in terms of investor sentiment, optimism continued to build among individual investors last week, while institutional investor positioning stabilized. Second, reporting season stayed “good enough” for the stock market to keep moving up last week. Strong beat rates and company commentary that emphasized the strength of underlying demand and the ability of many (though not all) companies to manage through inflation and supply chain pressures allowed the S&P 500 to make a new high, even though the few companies that did miss lagged sharply.
6 minutes | Oct 19, 2021
A Good Enough Start To 3Q21 Reporting Season
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.
6 minutes | Oct 12, 2021
The View From The Trenches Helps Put Current Worries Into Context
This week in the podcast, we runthrough the results of our latest quarterly RBC analyst survey, in which wepoll 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 next6-12 months remain optimistic, driven by constructive views on fundamentals,valuations, and cash deployment. Second, our analysts tilt most positive onFinancials, Energy, Information Technology, Utilities, and Health Care, andleast positive on REITs and Industrials. Third, policy outlooks generallyremain cool, though it’s worth noting most see higher corporate taxes as amoderate problem for earnings and performance as opposed to a major one.Fourth, while margin expectations have eased only a handful of our analystsconsider supply chains to be a major problem for the industries they cover.
7 minutes | Oct 5, 2021
The Mood of the Market Has Gotten More Pessimistic, But Investors Are Still Buying Value
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.
7 minutes | Sep 30, 2021
Institutional Investor Sentiment Finally Takes A Hit
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.
5 minutes | Sep 20, 2021
Supply Chain Concerns Spark Deterioration In Investor & Earnings Sentiment
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.
7 minutes | Sep 14, 2021
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.
3 minutes | Aug 30, 2021
Sustainable Fund Flows, Themes in Focus & New Fund Launches
This week in the podcast, guesthost Sara Mahaffy, RBC’s ESG Strategist, runs through the team’s latest work onsustainable fund flows, ESG themes in focus, and trends in new sustainable fundlaunches.
7 minutes | Aug 24, 2021
The Dog Days of Summer
This week in the podcast, we provide an end of summerupdate on our earnings transcript review and the high frequency economic,sentiment, and virus indicators that we track. We also offer a few thoughts onwhat tapering means for US equity markets. Three big things you need to know:(1) Last week’s earnings calls provided an important reminder about thestrength of the consumer. (2) The reflation trades remain tethered to COVIDtrends. (3) We think equity investors have already priced in tapering to asignificant degree, given the underperformance of Value and Small Cap that wesaw earlier this summer.
7 minutes | Aug 16, 2021
Back to the Future
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.
8 minutes | Aug 9, 2021
A Rock and a Hard Place, and The Good Stuff In Between
This week in the podcast we runthrough our latest thoughts on positioning within the US equity market with aneye on longer-term trends through 2022, which has been the focus of ourconversations 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 currentpressures on the Value trade resolve (primarily COVID and growth concerns), wesee 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 startto get ready for 2022 outlook discussions, we are getting more balanced betweenValue/Cyclicals and Growth in our S&P 500 sector overweights. OurFinancials and Energy overweights remain, but we are lowering Materials fromoverweight to market weight. We are also lifting Tech to overweight from marketweight. (3) High quality leadership has returned to the US equity market,supporting our upgrade of Large Cap Tech.
6 minutes | Aug 2, 2021
The Four New Things We Learned In Week Three of 2Q21 Reporting Season
This week in the podcast(1) Most of the major trends and themes for 2Q reporting season that we’ve beenhighlighting over the past few weeks remained intact. (2) We learned four new,important things last week on slowing growth rates, supply chains, labor, andCOVID/mobility. (3) It’s not unusual for slowing growth rates to trip up thestock market temporarily following recessions. (4) The high-frequency data wetrack suggest mobility trends remain constructive.
7 minutes | Jul 26, 2021
A Better Overall Tone, But Key Challenges Remain
This week in the podcast we take alook at what we learned in the second full week of 2Q21 reporting season. Threebig things you need to know: First, the overall tone from management teamsimproved in week 2 relative to week 1, with a focus on the strong demand andcash deployment backdrop, increased confidence on the 2nd half, and COVIDconcerns toned down. Second, while we generally sensed a better tone regardingthe ability of companies to manage through margin pressures, we also came awaywith the impression that management teams are inclined to see generalinflationary and supply chain pressures as enduring for a bit longer. Third,while upward earnings revisions are still happening, we continue to see asoftening in earnings sentiment driven by deterioration in Financials, ConsumerStaples, Health Care, and Utilities specifically and Value, Defensives, andCyclicals more broadly.
7 minutes | Jul 19, 2021
Financials Fumble, COVID Concerns Creep Back In
This week in the podcast, we take alook at what we learned from week 1 of 2Q21 reporting season. The two bigthings you need to know: (1) 2Q21 reporting season got off to a sour start, butit’s too early to gauge the overall tone, as last week’s reporters were mostlyFinancials, and their weak stock price reactions, stand in contrast to the morepositive reactions seen by the early reporters. (2) COVID discussions haven’tdisappeared from management commentary which have highlighted ongoing vigilanceon the Delta variant. This may contribute to additional pressure on thereflation trade in the near term, as the Large/Small, Growth/Value, andSecular/Cyclical trades have started to move in tandem with domestic casecounts again.
5 minutes | Jul 12, 2021
2Q21 Earnings Preview
This week in the podcast, werun through our thoughts on 2Q21 reporting season, which gets underway thisweek. Three big things you need to know: (1) 2Q21 reporting season is offto a good start, based on the stats of the early reporters. (2) An importantshift in earnings sentiment has occurred, with Cyclicals, Value, and Financialsweakening. (3) Our recent analyst and investor surveys suggest inflationimpacts will be one of the key issues to monitor.
6 minutes | Jul 7, 2021
The Mood of the Market Is Fading Optimism
This week in the podcast, we runthrough the results of our 2Q21 US equity investor survey, conducted June 22nd– 29th. The respondents were mostly US focused and based portfolio managers.All were institutional investors. The big things you need to know: Overall, USequity investors remained optimistic, though optimism did fade a bit relativeto our late March survey. Cash deployment and economic outlooks are strong,though valuations, margins, inflation, COVID variants, the Fed, and Washingtonpolicy are all weighing on sentiment. Interest in reflation trades is alsofading.
7 minutes | Jul 1, 2021
A Potential Expiration Date
This week in the podcast, wetake a look at the historical playbook around Fed tapering and hiking, and whatit means for our US equity market outlook. We’ve moved into the flattening campon multiples, as Fed rate hikes are historically a headwind for forward P/E’s.While we don’t think these trades are done playing out yet, we think Fedtapering and rate hikes, and the cooling off of economic growth that’s alreadyanticipated for 2023, put a potential expiration date on the rotation intoValue, Cyclicals, and Small Caps.
6 minutes | Jun 23, 2021
The View From The Trenches Looks Pretty Good
This week in the podcast, we discuss the resultsof our June survey of RBC’s equity analysts. The big things you need to know:(1) Outlooks for performance over the next 6-12 months remain constructive,driven by optimistic views on fundamentals and cash deployment. (2) The resultsa guide for the best ways to get exposure in three distinct parts of the USequity market - Financials & Energy within Cyclicals, InformationTechnology within Secular Growth, Health Care & Utilities within ClassicDefense. (3) The survey helps to set the stage for what we expect to be animportant earnings season, with roughly half of our analysts saying it isunclear to what extent inflationary impacts are baked into company guidanceand/or consensus estimates.
6 minutes | Jun 20, 2021
What We Think The 10 Year Has Been Telling Us
This week in the podcast, we recap our thoughts on how we’d play defense in the very near-term, if short-term macro indicators like ISM are in the process of making a peak – something we think the decline in 10 year yields throughout most of 2Q may have been signaling. Our bottom line – we worry a peak in major macro indicators like ISM could spark a pullback in the market or a pause in the rotation into Value and Cyclicals. We think there’s a case for adding some exposure to Classically Defensive sectors in the near-term. But longer-term we still like Cyclicals.
5 minutes | Jun 9, 2021
Top Stocks Aren’t Having a Good Year, But Long-Only Fund Managers Are
This week in the podcast, Lori takes a deep dive into the holdings of actively managed Large and Small Cap funds, based on their 1Q filings. Though the data lags, it usually provides important insights into active manager positioning and sentiment, and this time it was actually quite insightful. The big thing you need to know – the favorite stocks of long-only managers in both Small Cap and Large Cap aren’t performing very well in 2021, but it doesn’t really matter as the funds themselves are still having a very good year, due to good stock picking in 1Q and some favorable sector exposures.
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