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Get the transcript here: https://completeintel.com/higher-for-longer
This Week Ahead is joined by Bob Elliott, CIO at Unlimited Funds, Sam Rines from Corbu, and Josh Young from Bison Interests. In this episode, we delve into three crucial themes - Higher for Longer (H4L), Earnings, and Refining Margins - with a focus on stocks like $FRB, $META, $MSFT, $AMZN, $KMB, $XOM, $NOV, and $VLO.
Bob Elliott kicks off the discussion on H4L, sharing his insights on the current stocks versus bonds situation under this environment. Despite little progress from the Fed, he notes that equities signal a different outcome from bonds, which indicates an impending recession.
The panel then engages in a deep dive, discussing the possibility of the Fed relenting on inflation, the duration of the H4L phenomenon, and the role of the labor market in shaping its trajectory.
Sam Rines then shifts the focus to Earnings, highlighting key trends in the First Republic and Kimberly Clark stocks, including a decline in Price Over Volume. The panel also touches on the tech industry, analyzing its current position and outlook.
Finally, Josh Young explores the intriguing topic of Refining Margins, with a particular focus on the US and China dynamics that have contributed to Valero's strong earnings report. Josh examines the significant drop in refining margins in recent months, assessing how the trend fits into the historical context of this industry.
Key themes:
1. Higher for Longer (H4L)
2. Earnings
3. Refining margins down, but strong demand
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This is the 63rd episode of The Week Ahead, where experts talk about the week that just happened and what will most likely happen in the coming week.
Follow The Week Ahead panel on Twitter:
Tony: https://twitter.com/TonyNashNerd
Bob: https://twitter.com/BobEUnlimited
Sam: https://twitter.com/SamuelRines
Josh: https://twitter.com/Josh_Young_1
Time Stamp:
00:00 - Start
00:00:45 - Tony introduces the discussion topics: "higher for longer" with Bob, earnings with Sam, and energy with Josh.
00:01:31 - Tony and Bob talk about stocks vs. bonds in a "higher for longer" environment.
00:02:11 - Bob discusses the US economy and the Fed's lack of progress.
00:04:53 - Bob talks about the short-rate market and the low probability of interest rates going down to 3% in the next 18 months.
00:14:17 - Bob expresses concerns about the economy and rising prices of core services.
00:20:26 - Bob and Sam discuss the Fed's focus on inflation.
00:21:53 - Tony mentions Mohamed Al-Arian's comment on the Fed being overly data-dependent.
00:22:22 - Josh talks about events that could affect the Fed's decision-making process.
00:24:33 - Tony, Josh and Sam discuss the trend of "food as a service" and its impact on companies like Chipotle and Cracker Barrel.
00:29:00 - Bob and Tony talk about earnings and communication issues at First Republic.
00:30:24 - Discussion of management teams and regional banks
00:32:00 - Talk about revenue lines at consumer-facing companies
00:33:45 - Tony appreciates Sam's prediction about consumer staples
00:35:46 - Discussion of pricing algorithm for the rest of the year
00:38:46 - Start of the segment on inflation and rising prices
00:43:13 - Discussion on AWS growth decline and Azure growth comparison
00:44:40 - Josh talks about Exxon and Chevron's Q1 earnings
00:46:04 - Josh's bearish outlook on refining companies
00:49:31 - Tony asks Josh about services companies and opportunities
00:54:04 - Josh explains the need for higher day rates for new rig builds
Listen on Spotify here: https://open.spotify.com/episode/5wMB5tpeKSOxMBbH2gpdeI?si=8d39ecab24e84434
Listen on Apple Podcasts: https://podcasts.apple.com/us/podcast/complete-intelligence/id1651532699?i=1000611124320
#TheWeekAhead #economicoutlook #stocks #bonds #Fed #inflation #H4L #earnings #tech #refiningmargins #US #China #Valero #VLO #FirstRepublic #FRB #KimberlyClark #KMB #corporateperspective #industryinsights #investments #finance #stockmarket #investing #trading #META #MSFT #AMZN #XOM #NOV #BobElliott #SamRines #JoshYoung
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