3Fourteen Research
@3F_Research
The next generation of investment research.
Q3 REVIEW - FULL-CYCLE TREND MODEL Q3 PERFORMANCE -FCT = +12% -SP 500 = +4.6% -SP 500 EW = +9.5% -QLTY = +4.2% -QUAL = +4.6% YTD -FCT = 27% -SP 500 = +20% -QLTY = +22% -QUAL = +21% 3YR -FCT = +50% -SP 500 = +39% -SP EW = +24% More on FCT here: d2mnkrcyowo3a8.cloudfront.net/reports/2024/b…
The 3FR 2025 H2 Outlook is now out to clients. -Despite the "event-driven" first half, the major equity, fixed income, and commodity trends we outlined back in our 2025 Outlook remain intact -After a sentiment/positioning reset, technicals are largely positive -AI usage ramping
S&P 500 EARNINGS 26% of the fall in post-Liberation day forward EPS is attributable to the Energy sector. Stripping out Energy, forward EPS down <1%... Not a recessionary earnings path yet... @3F_Research
S&P 500 - SENTIMENT Now touching extreme optimism. Would be logical to see the market cool between mid-August and mid-October. @3F_Research
New report out to 3FR clients: -Trump's threat to replace Powell w/ an administration puppet is accelerating the debasement mindset. -Automatic flows to dry up between mid-August and October. -Introducing the new 3Fourteen Daily Sentiment Composite.
Client FYI: The 3Fourteen H2 Outlook call is this morning. @WarrenPies and @fernavid will discuss the research themes, positioning as we enter Q3. Joined by @gary_sarkissian
Clients check your emails for an important position shift.
Appreciated the conversation! We covered a lot of ground in an hour... -Deflation to debasement shift, -Housing update, -Bond market scenarios, -Equity targets, valuations, and catalysts.
OUT NOW - @WarrenPies of @3F_Research returns to @opmpod. @3F_Research's work isn't pointing to a recession and technical & fundamental indicators have them bullish on stocks. If a recession does materialize they think it will show up first in the housing sector 🏘️📉
FED Interesting divergence setting up between the Fed's SEP (June) and the Dec SOFR contract. Fed signaling fewer cuts but the market is pricing additional cuts. Despite what the Fed is projecting, the entire yield curve moving like SOFR curve will win the argument.
Our model's suggest the current buying mania puts this move in the "6th inning" or so. On average, the S&P 500 is +13% in the six months after these de-risking/re-risking events. @3F_Research
AI adoption by U.S. businesses taking off Based on @fernavid work, daily tokens generated to ~4X by the end of 2026. So much time spent thinking about market's downside risk (rightfully) but the potential productivity boom could/should start to show up in S&P 500 results soon.
S&P 500 - STRATEGIST TARGETS Strategists continue to dial down their year-end S&P 500 price targets, which cures one of our big concerns coming into 2025 (i.e. strategist optimism). Excerpt below from the 5/1 @3F_Research report - case for equities and bottom signs.
GLOBAL YIELDS Zooming out, the shift higher in yields this year has been a normalization after an era of extreme monetary policy. You can see this in the relationship between the 2 vs 10-year JGBs during the YCC era (red) vs evolution in yields since (green). @3F_Research
New report out to 3FR clients. -2025 price action reflects the investor shift from a deflation mindset to a debasement mindset -Equity risks more likely to emanate from the bond market -Yield curve normalization is largely complete...bonds are now fairly valued (based on SOFR)
S&P 500 The SP500 +19.7% off the 4/8 lows. If this turned out to be a bear market rally, it would rank as the fourth largest on record. @3F_Research
Fernando showing off the 3Fourteen chart catalog…
A quick demo of the chart catalog feature on the 3Fourteen Research client site. Along with archives of every report we have ever written, every chart we have ever featured in our research is searchable and available with a link back to the report it was originally featured in on…
New report out to 3FR clients. Discussing: -Technical buy signals pile up post-trade war. -New tax bill likely to frontload fiscal impulse (through 2029). -Fiscal dominance looms...will eventually threaten Fed independence but that is a story for another day.
Clients check your email for an important announcement
Late to posting, but I enjoyed the conversation w/ @AshBennington We covered the entire tariff melodrama and our strategy for navigating. Taped on 4/22 when the S&P 500 was 5,287...In this world, two weeks feels like two decades. Unlocked link realvision.com/bvfh5867th
New report out to 3FR clients: -Continued signs of bullish sentiment (strategists dialing back targets), -Technical confirmation lacking, and -Bond rally to continue...with risks looming.
Through the first four months of the year, the 3Fourteen FCT Model is now outperforming: -S&P 500, -S&P 500 Equal-Weight, -$QLTY, and -$QUAL For May: Buys = $AON, $BRO, $CPAY, $MMC, $SNA, and $UNH Sells = $WMT, $TT, $RMD, $GWW, $GOOGL, $DECK
