Epsilon Theory Professional
In Summary
More than ever I can hear the approaching hoofbeats of the Fourth Horseman – a regime change in inflation expectations. The hooves are still distant, and you’ll have more bites at the portfolio-preparation apple as global growth concerns in China and Europe persist. But prepare you should.
Soros’s Reflexivity is another name for the Common Knowledge Game, just focused on price action narratives. We see the development of just such a price action narrative today in macro world, one that surely makes Trader George’s ears prick up.
In the big picture, we’re still in the middle of a technically uncertain game of Chicken between the U.S. and China. But Powell’s VERY public about-face on Friday, coupled with the VERY strong jobs report, creates a VERY different investment backdrop for the US-China trade impasse.
In Focus
ET In Focus reports are narrower analyses of the narrative structure and trends on specific issues, companies, sectors, countries or financial markets.
US Banks have a common narrative structure – two competing topics of vastly different sentiment, with one dominating market attention at any given time. Worthy of some thought going into bank earnings week.
We examine how Apple found both of the ways to lose on narrative in less than two months’ time, and outline how that might change the playbook for the near-, medium- and long-term for different investor types.
With increasing attention to trade and tariff narratives and falling attention to inflation and growth narratives in the U.S., we believe that investors may benefit from focus on sectors on which the latter narratives have weighed heavily in 2018. Of particular interest? Brand-oriented consumer stocks, especially many staples that have been left for dead.
In The News
ET In the News delivers ET Professional subscribers weekly summaries of the news articles most critical to the narrative surrounding companies reporting on earnings, major economic and central bank reports, etc.
Another big earnings week across banks, insurance, energy services, staples, transports and other industrials.
A busier than usual week, as first quarter earnings season kicks off for banks and airlines. A few other notables in tech and energy, as well.
Three reporting companies this week. The most-connected articles include an odd weed obsession among media and analysts, and a…rather unfortunate Delta experience.