Merch Store

Takeaways from Tel Aviv... investors wait for clearer signs of falling inflation but that is also consensus. 2023 EPS probably above consensus if USD softens in 2023.

I just returned from a multiday visit with institutional investors in Tel Aviv. Over the course of two days, we sat down with over 80 institutional investors representing AUM of >$500 billion. We spent half a day in Jerusalem (my first visit there) and in that short time, managed to see the Wailing Wall, Dome of the Rock and Church of the Holy Sepulcher.

Similar to the plurality of our institutional investor meetings in the US, investors are overall quite cautious. And the following are the drivers:

Inflation is the primary concern. The starting point is many cite the high level on YoY as headline of +7.7% (Oct) and Core +6.3% as alarming. And the Fed funds of 4.0% woefully low when looking at these inflation rates. Additionally, many did not quite understand the market's enthusiasm over a better than expected Oct CPI as many saw risks for inflation to continue accelerating.Investors are taking the Fed and FOMC at face value. Meaning, investors are expecting the Fed to raise at least +50bp in Dec (some think +75bp) and increases thereafter as many expect the FF terminal rate to be something higher than the "dot plots" of 4.6%. On earnings, many are skeptical of consensus 2023 EPS of $233 (+5% YoY) and many expect earnings to be down -10% to -20% in 2023 given ...

Unlock this article with a FREE 30-Day Trial!

No Credit Card Required! Limited time only!

An FSI Pro, or FSI Macro subscription is required in order to access this content.

*Free trial available only on a monthly plan

Disclosures (show)
You have reached the maximum amount of complimentary reports for this month.
You will receive 3 more complimentary reports as of the 1st of July.
FS Insight Guest PASS

Unlock 2 more articles by joining our newsletter!

Take Your Investing to the Next Level with our Award Winning Research!

Don't Miss Out
First Month Free