Value Investing

Vladimir Dimitrov, CFA

Equity Bottom-Up

Lyondellbasell Indu Cl A / Equity Bottom-Up

<ul>
<li>LyondellBasell continued to outperform the broader equity market as declining margins seem largely priced-in.</li>
<li>The company remains well-positioned to weather increased risk of recession in 2023 and geopolitical tensions in the future.</li>
<li>The firm is well- positioned to weather an increased risk to recession in the 2023.</li>
</ul>


LyondellBasell continued to outperform the broader equity market as declining margins seem largely priced-in.
The company remains well-positioned to weather increased risk of recession in 2023 and geopolitical tensions in the future.
The firm is well- positioned to weather an increased risk to recession in the 2023.


LyondellBasell: What To Expect As It Reports Full Year Results

High Quality Stock Setups, Weekly Stock Bull Finder

Weekly Stock Bull Finder

High Quality Stock Setups

Finding high potential stock setups on quality companies

Schnitzer Steel Industries Inc / Equity Bottom-Up

<ul><li>As 1Q earnings season ramps up this upcoming week, it’s a good time to check cushions on existing holdings as this earnings could have lots of volatility.</li><li>For example, last quarter, some big cap tech “titans” like Meta (formerly known as Facebook) and Netflix saw significant institutional selling post earnings after earnings misses and will be under pressure this quarter </li><li>Companies are seeing enormous margin pressure on supply chain costs, labor costs, material costs, etc. that only went higher this past quarter</li></ul>

As 1Q earnings season ramps up this upcoming week, it’s a good time to check cushions on existing holdings as this earnings could have lots of volatility.For example, last quarter, some big cap tech “titans” like Meta (formerly known as Facebook) and Netflix saw significant institutional selling post earnings after earnings misses and will be under pressure this quarter Companies are seeing enormous margin pressure on supply chain costs, labor costs, material costs, etc. that only went higher this past quarter

Managing Director

Elan Gore

TMI Data Science

TMI Data Science utilizes Natural Language Processing to build custom leading indicators using unstructured data sourced from the global financial, trade & traditional media.  Our proprietary software, TMI Machine, is a text-mining platform designed with the buy-side & capital markets professional in mind, text-mining the global media to discern and quantify nuanced qualitative shifts in press coverage as they apply to macroeconomics, equity indexes/ETFs, commodities, currencies, fixed income & individual equities.  TMI provides custom leading indicators and systematic trading strategies, operating at the nexus of linguistics & statistics drawing on vast experience in investment banking and hedge fund settings in senior quantitative and fundamental roles.  

TMI Data Science was founded by Elan Gore, an award-winning Senior Global Basic Materials Equity Analyst & China Economist with 15 years of experience in North American hedge funds & institutional managers; and Alessandro Porrino, Ph.D., an Algorithmic Trading Analyst and Programmer with 10 years of front-office experience ranging from complex FX option pricing to auto-hedging strategies at Bank of America Merrill Lynch and Standard Chartered.  Mr. Gore holds an MBA in Finance from New York University Stern School of Business, and Mr. Porrino holds a Ph.D. in Systems Engineering from Brunel University London.

Macroeconomics

<ul>
<li>This year's narrative from US treasuries suggests a short-lived inflation/overheating scare in Q1, which coincided with Winter Storm Uri and the Texas power crisis, along with an initial phase of tapering talk from regional Fed presidents which subsequently faded; since the March peak, 10yr yields are down -45bps or a whopping -26%, representing the view that inflationary pressures have been entirely transitory</li>
<li>The picture from 5yr TIPS breakevens and the 5yr5yr has been more closely attuned to commodities:  In the past 6 months, 5yr TIPS breakevens and 5yr5yr have been 74% and 70% correlated with copper prices vs. the 10yr yield's 46%, though correlations with oil have been low; breakevens peaked with copper in May and bottomed in June-July</li>
<li>While 10yr yields continued to grind lower in July, our text mining is picking up a new surge in reports of supply constraints, which have been strongly correlated with breakevens and reflect corporate commentary in the current earnings season</li>
<li>The inflation narrative from treasuries appears to be asynchronous with the Q2 earnings season narrative from cyclical corporates, who are uniformly reporting worsening raw materials inflation expected in Q3 and lingering supply constraints</li>
<li>Nonetheless, our text mining acknowledges that talk of tightening financial conditions last spiked in March and has not resurfaced since, and expectations of a massive US infrastructure package have faded</li>
</ul><div class="content-highlight"><p>TMI Data Science utilizes Natural Language Processing to build custom leading indicators using unstructured data sourced from the global financial, trade &amp; traditional media. Our proprietary software text-mines the global media to discern and quantify nuanced qualitative shifts in press coverage as they apply to macroeconomics, equity indexes/ETFs, commodities, currencies, fixed income &amp; individual equities. </p></div>


This year's narrative from US treasuries suggests a short-lived inflation/overheating scare in Q1, which coincided with Winter Storm Uri and the Texas power crisis, along with an initial phase of tapering talk from regional Fed presidents which subsequently faded; since the March peak, 10yr yields are down -45bps or a whopping -26%, representing the view that inflationary pressures have been entirely transitory
The picture from 5yr TIPS breakevens and the 5yr5yr has been more closely attuned to commodities:  In the past 6 months, 5yr TIPS breakevens and 5yr5yr have been 74% and 70% correlated with copper prices vs. the 10yr yield's 46%, though correlations with oil have been low; breakevens peaked with copper in May and bottomed in June-July
While 10yr yields continued to grind lower in July, our text mining is picking up a new surge in reports of supply constraints, which have been strongly correlated with breakevens and reflect corporate commentary in the current earnings season
The inflation narrative from treasuries appears to be asynchronous with the Q2 earnings season narrative from cyclical corporates, who are uniformly reporting worsening raw materials inflation expected in Q3 and lingering supply constraints
Nonetheless, our text mining acknowledges that talk of tightening financial conditions last spiked in March and has not resurfaced since, and expectations of a massive US infrastructure package have faded
TMI Data Science utilizes Natural Language Processing to build custom leading indicators using unstructured data sourced from the global financial, trade &amp; traditional media. Our proprietary software text-mines the global media to discern and quantify nuanced qualitative shifts in press coverage as they apply to macroeconomics, equity indexes/ETFs, commodities, currencies, fixed income &amp; individual equities. 

TMI Snapshot:  Asynchronous Inflation Narratives

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

<p>Due to uptrend violations for the Nasdaq 100, S&amp;P 500, and Russell 2000 we continue to believe near-term consolidation is likely -- potentially something similar to what the market experienced between June and early-July. In today’s report we highlight attractive Groups and stocks within Consumer Discretionary &amp; Materials: Retailers, Footwear, Retailers, Teenagers, Metals, Steel, Integrated, Non-U.S., and Chemicals, Diversified.</p>

Due to uptrend violations for the Nasdaq 100, S&amp;P 500, and Russell 2000 we continue to believe near-term consolidation is likely -- potentially something similar to what the market experienced between June and early-July. In today’s report we highlight attractive Groups and stocks within Consumer Discretionary &amp; Materials: Retailers, Footwear, Retailers, Teenagers, Metals, Steel, Integrated, Non-U.S., and Chemicals, Diversified.

U. S. Equity Strategy: Bull-Bear Battle Continues

<p>New and ongoing developments continue to support our bullish outlook. In the “new” column, we have bullish inflections in Treasury yields, the value vs. growth ratio, and broad commodities (Bloomberg Commodity index). These are classic signs that the economy is improving and is historically consistent with prior equity bull markets. Another new development is the market becoming increasingly overbought. As we outline in today's report, being “overbought” is far from a sell signal.  We also highlight attractive Groups and stocks within Energy and Materials: Large-, Mid-, and Small-Cap Domestic Oil &amp; Gas E&amp;P , Chemicals, Diversified, and Specialty Chemicals, Petro/Basic/Commodity.</p>

New and ongoing developments continue to support our bullish outlook. In the “new” column, we have bullish inflections in Treasury yields, the value vs. growth ratio, and broad commodities (Bloomberg Commodity index). These are classic signs that the economy is improving and is historically consistent with prior equity bull markets. Another new development is the market becoming increasingly overbought. As we outline in today's report, being “overbought” is far from a sell signal.  We also highlight attractive Groups and stocks within Energy and Materials: Large-, Mid-, and Small-Cap Domestic Oil &amp; Gas E&amp;P , Chemicals, Diversified, and Specialty Chemicals, Petro/Basic/Commodity.

U.S. Equity Strategy: Value Overtaking Growth; Treasury Yields and Commodities Bottoming

United States

Dow Inc. produces and distributes chemical products. The Company manufactures and supplies chemicals for liquid injection molding, architecture fabrication, leather, textiles, automobiles, rubber consumer goods, and food industries. Dow serves customers worldwide.

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Dow (DOW US)

LyondellBasell: What To Expect As It Reports Full Year Results

The company remains well-positioned to weather increased risk of recession in 2023 and geopolitical tensions in the future.

Vladimir Dimitrov, CFA

Weekly Stock Bullfinder- Week of 4/18

As 1Q earnings season ramps up this upcoming week, it’s a good time to check cushions on existing holdings as this earnings could have lots of...

Weekly Stock Bull Finder

TMI Snapshot: Asynchronous Inflation Narratives

While the bond market continues to dismiss inflationary pressures, our text mining picked up a recent spike in mentions of supply constraints as...

Elan Gore

U. S. Equity Strategy: Bull-Bear Battle Continues

Due to uptrend violations for the Nasdaq 100, S&P 500, and Russell 2000 we continue to believe near-term consolidation is likely -- potentially...

Vermilion Research

U.S. Equity Strategy: Value Overtaking Growth; Treasury Yields and Commodities Bottoming

New and ongoing developments continue to support our bullish outlook. In the “new” column, we have bullish inflections in Treasury yields, the...

Vermilion Research

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