저자: Kevin · 외국인
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ISM·S&P 서비스 PMI 등 경기 지표가 예상보다 악화되며 소비와 기업 설비투자 둔화 우려를 제기. 기업들이 선제적으로 자본지출을 줄이면 자기유발형 침체가 생길 수 있다고 주장. 고가 호텔·항공·외식 등 고소득층 소비 둔화 신호와 재고/보수적 설비투자 축소를 근거로 소비재·항공·리테일을 비관. 반면 정부 보조금(CHIPS법, 인플레이션 감축법 관련 지원)을 받는 반도체·에너지·전기차 등 '픽액스' 성격 기업은 가격결정력이 있다고 봄. 주식시장은 이미 상당 부분 반영했다는 입장.
다듬은 글
oh my gosh s p Global pmis and ISM services this is a disaster this all comes after the employment change data and now we're getting reports that consumers are starting to flip-flop as well we had a lot to talk about in this video and the only thing that's making it remotely better is that you can get 25 off with short form short form.com slash meet Kevin more on them later but listen to this folks ISM Services the expectation was 54.4 we got 51.2 big drop on the services index there very big I mean we were at 55 1 54.4 small drop and then we went boom off a cliff almost contractionary there for services remember a number under 50 is contractionary and what does the FED want to see disinflation in Services well it's coming but the problem is how many eps's how many companies earnings per share are going to get devastated in the meantime I don't know that's just the ism Services indicator now I'm going to give you some examples of companies in just a moment but ISM came out along with s p Global Services today s p Global Services PMI tells us what we were at 53.8 we were expecting to be stable at 53.8 no we also missed 52-6 everything came in a little oopsy-doopsy today mortgage applications came in worse than expected ADP employment came in worse than expected uh we've got the jobs data coming out on Friday ah look let's talk about consumers let's talk about what's going on with consumption how this could hit EPs and which companies might start seeing cutbacks because it's a warning and these numbers just contribute to that warning let's go we know consumers make up over two-thirds of the economy and one of the things I love paying attention to is what's happening at the edges and the fringes what's happening with poor spending and what's happening with richer spending because it gives us an idea of where are people starting to cut back and there are two areas we're starting to see cutbacks where ordinarily you don't want to see them to keep a good boom bull market going and in this case we're going to look specifically at corporations and richer household spending so let's jump in with corporations then richer household spending but first let's understand what Barons thinks is happening in terms of corporate spending take a look at this here's a piece on company c a slow down ahead and this figure tells the story so let's take a look at the story that Barons is suggesting so first companies are tapping the brakes on Capital spending as they anticipate cooling demand that's not great they are conserving cash as they prepare for a tougher economic environment that might be prudent on their part and good news for shareholders after all good news for shareholders when a corporation Cuts back you temporarily see a boost to operating profits right but what if they're cutting the potential investments in their business that actually let them continue to seek growth this is actually a very stocks is wait a minute it's fantastic that the company I'm investing in is cutting their SG a expenses they're selling General and administrative expenses but if they're cutting selling are we potentially robbing from the future sure growth of the company to have a higher margin now during potentially a weaker time and often the answer is yes now in many cases there are also companies that just take advantage of the layoff cycle of a recessionary environment to get rid of poor performers this is very normal as well after all think about it companies don't want the reputation of firing poor performers because if people regularly get fired it makes it harder for a company to promise job security to new employees when they come however if a company can throw up their hands and say whoa recession sorry man we gotta cut back we gotta you know we can't even offer the food we used to offer anymore sorry we gotta lay off a bunch of people generally not always okay not always but often the first people to get laid off for the poor performers that if a company had a firing policy would probably be fired anyway there are a lot of companies where people would actually be really hard workers in and they'd look around and go this is so frustrating there are other people putting in 10 percent the effort I do if they get paid the same amount but the companies don't have a policy where they can actually fire people so they wait for a recessionary cycle and then they go through the weeding cycle it's not not saying everybody who's laid off is affected by that just saying it's a very common thing that corporations do so in this same weeding cycle what is Barons telling us well they're actually saying that companies may be cutting back on capex substantially based on the charts Barons is looking at and that could be a red flag for companies that sell heavy equipment or Technologies and systems used in capex now the first thing that I think of when I think of heavy equipment is I think of the Investments that farmers were making during the inflationary cycle uh after uh the pandemic during the supply chain crises for shipping but also for food like Farmers for for even wheat after Russia invaded Ukraine or other food products that exploded after the pandemic such as even chicken and so heavy equipment that goes into farming or industrial manufacturing or even the processing of meats I think a lot of that heavy equipment was purchased and invested in during the pandemic or Commodities Bull Run cycles and that may get rained in now so I'm looking caterpillar John Deere as potential red flags here but I also scratched my head and wonder what about asml are they going to produce less chip manufacturing equipment well Barons actually gives us a little bit of insight into this analysts expect aggregate compacts for companies on the S P 1500 index to rise about seven percent just over one trillion dollars this year according to Citigroup that's down from a 21 increase in 2020 two that's about a one-third as much growth and it really kind of matches inflation it is expected to rise just two percent in 2024.
now this I think is interesting one of the biggest things that I personally have learned during this cycle is that things take a lot longer than normal to adjust it takes a lot longer than you'd expect for the market to bottom and for things like inflation to actually go away that patience is frustrating but it's also good for planning because if we're at the beginning of 2022 and we're thinking all right recession's coming within the next six months but it actually potentially takes two years it'd be good to plan for that potential heads up now weakness is expected in more economically sensitive sectors or those that see sales rise and fall with demand economic demand the consumer discretionary sector which includes retail restaurants and hotels is likely to see capex explain a drop rather by three percent this year now that's interesting because retail restaurants hotels and the like which would include Airlines would make you wonder wait a minute is it possible that that booming segment where jobs and wages are growing so strongly in retail restaurants Airlines hotels hospitality is it possible that those companies are going to rain back their expenditures on coffee machines new stoves uh you know new equipment for their airplanes whatever as they try to maintain profit margins and as they start seeing competition at the top where they can't raise prices anymore and the answer to this is likely yes quick note before we continue reminder to check out short form where you can get super powered book summaries to encourage you to potentially check out the entire book my favorite is Jim Collins you can get phenomenal insights on running a business through this app short form makes it so easy for you to explore different book titles of different genres and get in spray my goal is one short form a day check it out join the challenge and go to meet Kevin the links there on the website consider for example what Darden the uh company that runs uh Olive Garden for example is doing they're talking almost solely about efficiency and productivity and doing more with less back a year ago all they were doing was bragging about how they could raise prices this conversation a narrative has completely turned on its head now all of a sudden this the companies are realizing they're in a situation where they're looking at the scoreboard and they're going uh oh lost the lead that's not good they don't want to lose a lead they want to stay ahead but they don't have BB anymore they're not pricing power so what do they do they stop investing in their business and new equipment to try to maintain margins to appease their shareholders excuse me that is really borrowing from the future and giving to today because if you don't continue to reinvest in your business your sales will probably suffer in the future it's one of the reasons I'm personally bearish on on retail and hospitality and travel I understand there's a boom in that now but I'm bearish on it because I don't think it'll last in fact before we continue with this Barons piece I can tell you that there are already red flags that some of these sectors are starting to get hit look at this here is a piece from Bloomberg talking about hotel rooms over 500 a night are too much even for Rich Travelers and they talk about here this may be a reflection of diminishing consumer confidence that inflated prices have not been accompanied by a proportionate increase in service quality see this actually directly relates to the Barons piece and the argument that I'm making where companies are starting to cut back to maintain whatever margins they have they can't raise prices any more than they already have but then people are going what the hell I'm paying a premium and you all aren't even keeping up with expenditures and investments into your own business the service is actually getting worse in certain cases despite you paying a premium for certain products the results come during what should be one of the busiest periods for travel booking March is when people start finalizing summer plans and early birds get a jump on year-end holiday reservations okay however some 69 percent of poll participants said their maximum budget per hotel room was 500 while 24 were willing to spend a thousand dollars still five percent set their limit at two thousand and two percent were willing to spend three thousand respondents include Traders portfolio managers senior managers and Retail investors uh although 500 to 1000 might seem high the range eliminates the fanciest hotels in major markets okay so they kind of give a little bit of a breakdown here of of this survey and here is where they suggest a difference I'm always interested in the Delta the difference of what's going on the results of the survey suggest that luxury hotels restaurants and Airlines will face increasingly irritated customers or consumers this summer I don't even want to talk about how disgusting uh uh some hotels have gotten in that it's covid's over and they're still saying yup tip sorry no room service you know covert and I'm like this is yeah it's crazy anyway uh bank failures fast inflation elevated mortgage payments and the softening labor market especially in the high income sector such as Tech could see tourists keep discretionary spending in check this is a shift we wrote a little note here this is a shift uh from what we heard from American Express where individuals were still spending through the recession that was in the American Express last quarter earnings club and American Express appeals heavily to white collar and and higher income individuals so what's important about this well what's important is we're starting to see complaints at the margin at sort of the right side of the right tail maybe the higher income tale where people are starting to go okay starting to run out of money here it's starting to have to pull back in my opinion that's negative not just for the companies that would be investing in capex like we were talking about the hotels or Airline manufacturers but it's also a red flag that not only are we going to start seeing some of that softening at the lower consumer end where we're probably going to see most of the softening in most of the hip but we're starting at the margin to see some hit to that discretionary higher income phase and that's something to pay attention to as well this is why I always encourage people make sure you have some kind of side hustle where you're making additional income in fact if you want to make YouTube videos the easiest way in my opinion to do that is check out stream yard stream yard is awesome it's a fantastic platform it's a sponsor for this segment and they're a great platform where even if you're not live recording you could use a web browser to record yourself just go to metcaven.com stream yard to learn more you could use a web browser to record yourself now and actually pop up different windows or different banners and realize you could record your presentations download them in HD edit them even within the browser don't even need editing software anymore they do it with you so check out metcaven.com stream yard it's been a lifesaver for me for the past few years especially since I'm traveling so much there's this mentioned here in Bloomberg that retail investors see positive Airline share drivers but institutional and professional investors actually think the airlines are going to get hit pretty hard based on a lack of potential capex spending that we're starting to see at some of the airlines going back over here to Barons look at this the reason companies are watching they're big ticket spending is because they're preparing for more muted demand and profits you know there used to be this story uh that uh uh that my father-in-law used to tell me he goes Hey Kevin you know there's this uh there's uh this story about uh this father who ran an antique shop off the highway and uh and the antique shop was doing very very well it was like 2021 right the antique shop is killing it it's got growth its income is going up everything's fantastic it's spending money on Advertising it's growing it's going great and then the son whose college educated says well Dad don't you realize we're going into a recession you should cut back and so the father-in-law says oh no uh or the father said we're going into a recession that's that's terrible well we better cut our spending let's let's cut our spending on that billboard that we have at the corner of the freeway that says Exit here to our antique store let's let's not spend the thousand bucks a month anymore on that billboard because we need to prepare for the recession and so they canceled the billboard sure enough people don't come to the Antique store anymore because now the billboard is gone and all of a sudden income falls for the store The Father's like my gosh son you were right we're going into a recession and the point of the story is to argue that good Lord you know some of of the recessionary impact of the economy that we're in can very much be self-fulfilling when businesses cut their cap X spending they can induce their own recession now this is exactly why uh and I try to be really neutral here I'm just going to put my cards on the table and go the reason I selected the cards that I did is because I think the cards that I chose the stocks that I chose are basically businesses that not only have pricing power but are going to continue to invest in capex and growing their businesses during the recession whereas other businesses are cutting so I think Consumer Staples restaurant retail Hospitality all of those uh and even the Industrials like the Johnson and Johnsons the 3ms I think they're all looking at all of them because their cell self-inducing basically their own recession whereas I think the companies that are not are first of all the ones getting the stemi checks but second of all the ones that are basically the growth companies of the next decade the energies the chips uh certain electric vehicle manufacturers right those are the ones I think have pricing power because first of all they're getting massive stemi checks from uh the government that really helps you continue to spend and if you continue to spend you continue to grow and you don't self-induce your recession think about it for a moment if you're that antique store except instead of selling antiques you sell solar inverters and the government's like hey don't cut back on spending here's billions of dollars here's a fire hose of stemi checks please keep investing in your business and spending spending spending those businesses can be like all right like I hate to call it like stupid proof because obviously I can't guarantee it but I'm just saying if I could shake people and go come on it's obvious go where the stimmy chicks are going uh anyway so let's keep going with this Barons piece here and then we got to get to that corporate lash-up the reason companies are watching Big Ticket spending is because they're preparing for you to demand and profits the federal reserve's interest rate hike started last year but usually reduced demand and inflation with a delay so companies have only begun responding as they reduce large Investments once they see the beginnings of Destruction to demand and sales in fact city data shows that in the past few months banks have tightened their belts on lending as a result of consumer and business credit worsening what should curb demand now I'm actually surprised that we've actually started seeing some tightening on this because the banking crisis according to NatWest and many banks hasn't really started yet but then again they're talking about the past few months so it is it is true that we have seen if if the line is down like if I invert this usually tightening credit standards is an upline but if you invert it it just psychologically makes a little bit more sense like less availability of credit the credit tightening has kind of been doing this anyway I think there's this anticipate patient that the bank crisis would lead to more of a drop off but that hasn't happened yet but yes overall larger banks have been tightening over the last year uh okay so this reinforces stagnating earnings growth concerns stagnation is oftentimes what leads the stock market to turn red the good news though is according to Barons the stock market has already reflected much of the economic challenges and the s p 1500 while above its low of the bear Market is still down 14 from late 2021's record high the other good piece of news for stock investors is that lower capex means companies have more flexibility as to what they can do with their cash they can return more cash to shareholders through dividends and BuyBacks this by the way I think is a mistake I really think it's a mistake for corporations to give more dividends right now they should be investing more of their businesses but that's okay I still invest in some businesses that do BuyBacks as well look at end face for example which amplify shareholder Returns the s p 1500 free cash flow is expected to gain nine percent this year because of reduced capex that's fine but what's that going to do to return to earnings next year the point is that investors should expect weak demand going forward but that doesn't mean completely shy away from the stock market fine but what do we want to keep in mind going forward and where's the CEO lash out well the first thing that I would keep in mind is and it meant alluded to it earlier and I wanted to give you my opinion on I was initially thinking okay caterpillar John Deere but what about asml I think because of the chips Act and the massive amount of factories that are going to be built in the next few years and the fact that there's like a two-year wait to get a lot of this industrial equipment I think companies like asml are actually going to be just fine thanks to this this massive inflationary stimulus checks uh that are coming to not only electric vehicles solar and such but chips specifically well it's kind of wild but now I'm starting to get nervous and not just about Staples but I'm starting to get nervous about industrial manufacturing equipment manufacturers I still have hope for Aerospace because in Aerospace you still have supply chain lags but if that catches up everything is going to get hit and as long as we go in the shallower session hopefully the growthiest of the companies still do well but then you also have ai and the quote AI arms race look at that it's literally on CNBC right now the AI arms race okay you have them coming for your profit margins as well it's like oh my gosh it's becoming a challenging time to invest but that's why my opinion is looking for pricing power stocks PP style stocks where you're basically looking at investing in the pickaxes in my opinion that's chips and energy and that's because they're getting the fire hose of the stemi checks so learn more about pricing power stocks or other information like my actively managed ETF by going to meet kevin.com right next to the links for my courses or Affiliates and sponsorships at meet kevin.com thanks so much
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