This week, Tematica’s investing mixologists Chris Versace and Lenore Hawkins discuss numerous current headlines that illustrate the power of some of Tematica’s investing themes. The powerful intersection of Content is King , Connected Society and Disruptive Technology themes has driven a company like Apple to evolve from primarily a hardware and associated OS developer into now producing shows with Hollywood stars Jennifer Aniston and Reese Witherspoon. Apple is also moving deeper into our Cashless Consumption theme as its latest iOS beta software debuts Apple Pay Cash The combined force of Disruptive Technology, Connected Society and Cashless Consumption is lifting millions of people in sub-Saharan Africa out of poverty . While the velocity of corporate earnings begins to slow, we’re once again hearing of brick & mortar retail woes as same-store-sales growth continues to fall.
Related: Exploring the Ever More Interconnected World of Our Connected Society
Our mixologist also breakdown the current state of the markets and analyze the latest economic data rolling in, much of which is at least flashing a yellow warning light:
Oil prices are the highest they’ve been since 2015, putting a strain on the already struggling Cash-Strapped Consumer as gas prices soar 17% year over year. The dollar continues to strengthen, which is a headwind for those companies that generate a large portion of sales overseas – we’re looking at you big tech. Corporate debt levels are at record highs and margin debt has been growing at a 12% annual rate while equity fund cash balances are at near record lows – who’s left to keep buying and what does it mean if the market hits a speed bump? With trading volumes falling and breadth getting weaker, we can see that those indices are breaking new record highs based on fewer and fewer buyers. Another reason we ask, who’s left to keep buying? With Investor Intelligence survey reporting 5 bulls for every bear and Market Vane putting equity bulls at 70%, near the top of the historical range, who’s left to get bullish? In D.C., tensions are rising as the GOP lost some key battles for state governors as President Trump’s approval rating continues to drop, making tax reform by year’s end increasingly unlikely. If holiday shopping is weaker than expected and tax reform is pushed into 2018, will this endless equity melt-up get a winter chill? Companies mentioned on this podcast
Activision Blizzard (ATVI) Amazon (AMZN) Apple (AAPL) Costco (COST) Facebook (FB) JC Penny (JCP) Kohl’s (KSS) Macy’s (M) Netflix (NFLX) PayPal (PYPL) Take-Two Interactive (TTWO) Target (TGT) Venmo (PYPL) Wal-Mart (WMT)
Resources for this podcast:
Chris Versace – @_ChrisVersace Lenore Hawkins – @EllesEconomy Tematica Research – https://www.tematicaresearch.com Themes Report: https://www.tematicaresearch.com/whatisthematicinvesting Cocktail Investing: Distilling Everyday Noise into Clear Investment Signals for Better Returns
