John Hughes jhughes@epiphanyresearch.com 212-692-6391
The economic news continues to show a weakening economy. The dollar believes this is the case as it continues to weaken. The bond market believes it’ the case as yields continue to fall. Metals believe it too, as they continue to rally. The stock market however, doesn’t believe it or is just ignoring it. We would be careful with consumer discretionary names at this point, especially the electronics retailers, which are showing signs of weakening and are vulnerable to further weakness. The multi-national consumer staples issues continue to act well and are strengthening with the falling dollar. We would look to this sector for long ideas. Pepsi (PEP) and Kellogg (K), are a couple of names to look at. Yes, we know they are boring, but they look good.
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