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A Reflationary Inflection in Oil Inventories

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Venezuela has experienced a collapse in oil production this year as the country sinks into chaos. Daily production is down from 1.7M barrels/day at the end of last year to just 1.44M barrels/day at the end of May. Year-over-year production declines are even larger, down about 500k barrels/day. Production peaked in October 2015 at 2.38M […]

Semiconductor Leadership Highlights the Rotation Into Value Stocks

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Semiconductor and semiconductor capital equipment stocks have been stellar performers lately, a trend we have been a bit slow to recognize. So, I decided to do a deep dive on semis and semiconductor capital equipment stocks to see if there is opportunity left to capture. Indeed, when I combine the developed and emerging market industry […]

Divergent Path of US Corporate Profits

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Yesterday we got the latest glimpse into US corporate profitability. Depending on the series observed, corporate profits are either flat-lining or rising. Before-tax corporate profits, the blue series in the chart below, are actually net down by $32 billion from the peak in 2014. Yet, after-tax profits are up about $130 billion from that same […]

Quarterly Strategy Update: Volatility Shocks & Dollar Bears

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Price excesses have built up over a long bull market. Stocks are expensive, and the volatility shock wave is traveling the globe. This quarter, we discuss the risks correlated with the current volatility, potential new sources of instability, and the sectors that could be the performance beneficiaries of these trends. Our research indicates we have […]