RBC's Markets in Motion

This week in the podcast, we run through our main takeaways on 4Q21 reporting season, with just over half of S&P 500 results in. The big things you need to know: First, the earnings resiliency we discussed in our last Spotlight solidified over the past week, supporting the stock market. Second, early sector standouts include Tech, Energy, and Health Care. Third, our quantitative transcript review suggests confidence has slipped a little, along with demand and margin views. Fourth, our manual review of earnings calls transcripts has kept us vigilant on the consumer, but not panicked.

This week in the podcast, we run through five good things we’re seeing in the data right now for the broader US equity market right now. First, bottom-up 2022 and 2023 EPS forecasts have been holding steady. Second, the contraction in the S&P 500 forward P/E is in line with past Fed tightening periods. Third, the valuation gap between the most expensive and least expensive stocks is getting close to pre-pandemic levels. Fourth, retail investor sentiment is back to pandemic lows. Fifth and finally, Small Cap futures positioning is on the cusp of net short territory, and isn’t too far above where it bottomed in March 2020.

In this episode, we run through early takeaways from the 4Q21 earnings reporting season, a few new thoughts on the Growth/Value rotation, and an update on investor sentiment. Four big things you need to know: First, performance has been poor, with 63% of S&P 500 companies falling significantly post results and companies missing on revenues getting hit hardest. Second, our transcript review suggests that labor is emerging as the new hottest topic, and that omicron disruption may have been greater than anticipated. Third, our valuation work suggests that progress has been made on the Growth rotation, but that it still has room to go. Fourth, retail investor sentiment is close to pandemic lows, a positive for stocks on a 12-month view.

In this edition of the podcast, we discuss the biggest takeaways from the publication of Macroscope, our big monthly chartbook digging into the US equity market from top to bottom, looking at everything from the S&P 500 to style to sectors to industries to factors and Small Caps. Two big things you need to know. First, we’re sticking with our 5,050 forecasts for the S&P 500 at year-end 2022, a tougher year but one that ultimately sees modest gains. Second, while we still like Value and Cyclicals in early 2022, we’ve lost faith in Small Caps’ ability to see an early year outperformance trade and dig into the reasons why.

In this edition of the podcast, we review our latest thoughts on the fierce rotation we’re seeing from Growth to Value and Cyclicals so far in 2022. Two big things you need to know: (1) We think it’s premature to declare the rotation out of Secular Growth into Value and Cyclicals over yet. (2) We’ve continued to get questions about what to own in a rising rate environment – our answer is pretty simple – sell what’s expensive (a list still dominated by Tech) and buy what’s cheap (a list still full of commodities and Financials).

This week in the podcast, we run through the results of our quarterly RBC US equity analyst survey, which we conducted in late December 2021. The big things you need to know: First, our analysts’ outlooks for performance over the next 6–12 months remain optimistic, boosted by constructive views on fundamentals, valuations, cash deployment, and margins. Second, across all questions, our analysts tilt positive on Energy, Financials, Materials, and Information Technology, along with Utilities and Health Care. Third, key issues in focus for our analysts are demand, COVID, inflation, regulation, labor, supply chains, and pricing power. What jumped out the most on hot topics is that our analysts generally see their companies as able to manage through the major challenges ahead, including Omicron.

This week in the podcast, we’re running through the results of our December US equity investor survey, conducted December 16th through 21st. Three big things you need to know: First, half of investors are optimistic on stock market performance over the next 6-12 months, supported by constructive views on the economy and cash deployment, but weighed down by concerns about valuations, policy and margins. Second, in terms of hot topics, monetary policy and inflation top the list of issues keeping investors up at night. Third, in terms of positioning, High Quality, US, and Large Caps, were the most popular choices for outperformance over the next 6-12 months, as the popularity of Value, Cyclicals, Financials and Energy faded.