Lori Calvasina, Head of US Equity Strategy at RBC Capital Markets, joins to discuss small cap stocks, Nvidia's valuation, short interest, potential upside surprises, mortgage rates, and more. They delve into market trends, AI focus, economic recovery, small cap vs. large cap stocks, earnings manipulation, and investor sentiment.
Market trends favoring smaller companies over larger global corporations post-COVID, indicating potential for advantageous macro tailwinds.
Importance of understanding the relationship between market performance and economic recovery for long-term investors in asset allocation strategies.
Challenges faced by companies in navigating financial reporting and maintaining revenue beats amidst evolving market dynamics.
Deep dives
Gene Wilder's Filmography and Collaborations
Gene Wilder's diverse filmography and collaborations are discussed, highlighting his work with Richard Pryor in movies like 'Silver Streak' and 'Stir Crazy,' as well as his iconic roles in 'Willy Wonka' and 'See No Evil, Hear No Evil'.
Favorite Burger Spots in New York City
The hosts share their favorite burger spots in New York City, comparing options like JG Mellon and PJ Clark's, reminiscing about dining experiences and locations like Battery Park City.
Recognition in Finance and Industry Events
The discussion shifts to the recognition received by industry professionals, including mentions of being named on the Barron's 100 Most Influential Women in Finance list, and the reception hosted by RBC at an energy conference.
Market Trends and Insights
Market trends and insights are explored, focusing on topics like working out the relationship between market performance and economic recovery, potential shifts in small-cap investments, and considerations for long-term investors in navigating asset allocations.
Small Caps vs. Large Caps: Macro Tailwinds and Relative Returns
The discussion revolves around the shift from global investment trends to a re-industrialization theme, now favoring smaller companies over larger global corporations. The analysis contrasts the struggles small caps faced post-GFC with potential post-COVID macro tailwinds, hinting at advantageous developments like hotter economies and potential interest rate relief. There is a nuanced consideration of differences in performance between bull and bear markets for small versus large cap stocks, highlighting historical trends and uncertainties related to future market behavior.
Earnings Beats vs. Revenue Beats: Corporate Financial Strategies and Market Implications
The conversation delves into the disparity between earnings per share (EPS) and revenue beats among companies, shedding light on how firms navigate financial reporting challenges such as managing profitability and revenue growth. Insights point towards companies potentially facing hurdles in passing costs to consumers and maintaining revenue beats, indicating a focus on manipulating earnings. With a notable gap between EPS and revenue beats percentages for Q1 2024, the discussion touches on evolving corporate strategies amidst market fluctuations and changing consumer dynamics.
On episode 147 of The Compound and Friends, Michael Batnick and Downtown Josh Brown are joined by Lori Calvasina, Head of US Equity Strategy at RBC Capital Markets, to discuss: small cap stocks, Nvidia's valuation, waning short interest, potential upside surprises, mortgage rates, and much more!
This episode is brought to you by Goldman Sachs Asset Management. Learn more about Goldman Sachs Asset Management Premium Income ETFs at: https://www.gsam.com
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