Perspectives Blog

Hanging in

Marie M. Schofield, CFA, Chief Economist and Senior Portfolio Manager | September 20, 2013

Recent retail sales data are well below expectations and probably an indication that consumers have become more cautious about spending. Financial conditions matter greatly, and the recent tightening is likely having some impact on housing activity and consumer attitudes. Spending follows wages and it will be difficult for retail spending to gain much traction with the tie to shallow compensation trends. The best one can say about consumer spe…

Gimme credit

Marie M. Schofield, CFA, Chief Economist and Senior Portfolio Manager | August 22, 2013

Economic data seem largely unchanged from past trends, despite uptick in retail sales. Consumers continued to pare their debt last quarter continuing a nearly five-year trend. Given consumer deleveraging, consumption remains tethered to income gains – and those gains remain sub-par. Last week’s economic data give a very mixed picture of the health of the consumer. While the market seemed to cheer the uptick in spending seen in retail sales rep…

The bean counting on second quarter GDP

Marie M. Schofield, CFA, Chief Economist and Senior Portfolio Manager | July 25, 2013

Second quarter GDP data looks soft, including a wider trade deficit and cuts in government spending. Positive factors include steady consumer spending and upcoming changes in the way GDP will be calculated. Growth is poised to improve in the second half, but the Fed’s models and forecasts seem overly optimistic. Final second quarter GDP data reports are trickling in, putting the footprint of economic growth into focus. It looks soft, weighed d…

Retail sector outlook – It’s a share game

Mari Shor, Senior Equity Analyst | March 17, 2014

…ock picking. Faced with structural and cyclical headwinds, apparel retailers will need global brand strength, enhanced technological capabilities and supply chain expertise to gain market share. Recent data points across the consumer space have been mixed, and retailers and investors are struggling to sort through the noise to determine underlying demand. To recap 2013, apparel retailers underperformed other sectors within consumer discretionary…

More light, less tunnel

Marie M. Schofield, CFA, Chief Economist and Senior Portfolio Manager | October 31, 2013

with key reports out this week on labor markets and manufacturing orders. Unfortunately, both reports present a picture of economic activity in the third quarter that ended on a soft note well before the government shutdown. Consumer sentiment measures slipped and housing demand cooled. Next week we will see reports on industrial production and consumer spending for September giving us a fuller picture of Q3 activity. But so far, growth appears…

Defense industry outlook – Looking past the headlines

Ben Blomberg, Senior Equity Analyst | March 17, 2014

The outlook for U.S. defense contractors has been improving despite all the negative headlines. Army spending is under pressure, but Navy and Air Force spending remain well supported. The recent Ryan-Murray deal is a substantial positive, with a more predictable DoD outlook. Defense investors have had their share of bad news around the trajectory of defense spending, starting with the Budget Control Act of 2011, followed by the failure of the…

A tale of two labor markets

Marie M. Schofield, CFA, Chief Economist and Senior Portfolio Manager | November 11, 2013

…ualized job growth is now up 1.74%, and it was only higher than this for a few months back in 2012. This certainly underscores that the economy weathered the government shutdown surprisingly well despite a hit to business and consumer confidence. But these gains still reflect an economy stuck near 2% growth. However, there were numerous distortions in the Household Survey. The unemployment rate ticked up slightly to 7.3% from 7.2%, as did the Un…