The LSEG U.S. Retail and Restaurant Q4 earnings index, which tracks changes in the growth rate of earnings within the sector, is expected to show a 33.7% growth over last year’s levels. However, much of this growth is coming from just two categories and our metrics show that six of 10 consumer-related industries have turned negative (Exhibit 1). Of the 204 retailers tracked by LSEG, the Broadline Retail sector is headed for the highest earnings growth rate in the fourth quarter, recording a 753.3% surge over last year’s level. The second strongest sector is the Restaurants & Leisure group with

General Electric may be the canary in the credit market’s coal mine. The company’s bonds tanked this week even as an asset sale briefly lifted its shares. That’s a warning shot for all debt investors. U.S. companies owe more money than ever, and the quality of their loans and bonds has deteriorated. Rising interest rates and slowing growth could make this a big problem. The ailing $75 billion conglomerate is an extreme case, but it exemplifies much of what has happened in corporate America and around the world over the past decade. Historically low interest rates fueled a massive borrowing

Tensions between the US and China appear to be rising, with disagreements over North Korea and the possibility that Donald Trump will invoke national security concerns to slap tariffs on Chinese steel imports. But if the chances of a trade war have increased, equity investors remain unconcerned. In fact, our China Exposure Index (CEI) shows that US firms with exposure to China continue to outperform their rivals. We have revisited the way we construct our CEI; building on our existing methodology we have constructed two new CEIs – a broad one, containing firms of all sizes, and a narrow one,