4Q2024 Quarterly Pulse Check

What are the key topics influencing investor sentiment and positioning ahead of earnings announcements?

23 Jan 2025

Check out the US Sector Specialist team's outlooks prior to earnings announcements across Consumer, Healthcare, Financials, Technology, Telco, Media and Internet, and Industrials and Materials sectors.

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      Allyson Gordon, Industrials and Materials Sector Specialist

      • Investors are cautiously optimistic on the short cycle recovery but prefer to see more confirmatory data points before meaningfully positioning for it
      • Investors are bullish on the longer-term AI cycle, but are becoming increasingly selective with their near-term exposures
      • Investors continue to stick with selective AI names, Airlines, and other high-quality companies with idiosyncratic stories
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          Kelsey Perselay, Telco, Media and Internet Sector Specialist

          • The set up into Q4 earnings has gotten incrementally complex given recent market volatility, driven by a fluctuation of macro data and inflation expectations
          • With the Magnificent Seven companies, 4Q ad budgets were better than expected due to political, brand recovery, and improved consumer sentiment
          • Investment in Media remains favored on CTV winners, and companies with live Sports and News exposure
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              Rob Ruple, Technology Sector Specialist

              • AI interest spans across Tech sub-sectors, with notable interest in Software due to potential AI monetization, Agentic AI advancements, and stable IT budgets
              • Most strategists believe the Technology sector will lead markets in 2025, but with moderated returns driven by earnings growth
              • Feedback in Semiconductor remains mixed, but there is ongoing enthusiasm sustained by those in the AI complex led by Nvidia and their latest chip advancements
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                  Jason Finkelstein, Consumer Sector Specialist

                  • The general consensus as we enter 2025 is that US consumers are in a stable position, as most Q4 pre-announcements have shown positive outcomes
                  • Home Furnishing stocks have become increasingly favorable, as have Home Improvement retailers, which is somewhat unexpected given the prevailing interest rate environment
                  • Investor sentiment remains particularly negative towards Packaged Foods, Beverages, with slightly less negativity on HPC products
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                      Rob O’Dwyer, Financials Sector Specialist

                      • As earnings season begins, the outlook for banks appears promising with positive investor feedback, despite relatively high expectations from specialist financial investors
                      • In this current expansionary period, anchoring to historical multiples such as Tangible Book Value, could mean missing out on potential upside opportunities
                      • Despite recent strong performance from banks, the underweight position from long-only active managers remains
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                          Dimiter Tassev, Healthcare Sector Specialist

                          • 2024 was challenging year for the sector marked by clinical trial setbacks, a slowdown in China, and the impacts of Trump's election
                          • While it is challenging to advocate for owning Healthcare over the near-term, MedTech appears interesting in 1H25 as it is far more immune to macro, policy, pricing and patent risk
                          • As the new administration's policies become clearer, there is optimism for more generalists to explore other areas of the healthcare sector, particularly in Pharmaceuticals and Managed Care

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