Core Insights - Inflationary pressures are moderating, leading to a return of price stability in markets, which is beneficial for many companies as they face lower input costs and improving profit margins heading into 2026 [1][2] Sector Analysis Consumer Staples - The consumer staples sector is poised for growth as key commodity input costs related to agricultural products, such as dairy, sugar, vegetable oils, and grains, decline [3] - Food processors and packaged-goods manufacturers are regaining margins that were previously compressed due to high input inflation [4] Capital Goods and Manufacturing - Capital goods and manufacturing companies are expected to benefit from easing inflation, particularly those that consume energy and commodities, such as chemical and heavy machinery producers [5] - Lower prices for petroleum-based inputs and industrial metals are reducing project costs and improving returns on new capital investments [5] Airlines and Logistics - Airlines and logistics companies are classic beneficiaries of easing price pressures, as fuel costs, a major operating expense, are declining [6] - Companies like Delta Air Lines and FedEx are well-positioned for margin expansion as economic activity normalizes, with fuel savings directly impacting their bottom lines [7] Company Highlights United Natural Foods (UNFI) - UNFI is regaining margins as inflation cools, with a projected revenue increase of 1% and a significant EPS increase of 187.3% for fiscal 2026 compared to the previous year [10] - The company has improved its gross margin by approximately 20 basis points year over year due to better procurement conditions [9] FedEx Corp. (FDX) - FedEx is undergoing a cost realignment initiative that resulted in $2.2 billion in annual cost savings, positioning it for margin recovery as inflation pressures fade [11] - The company is expected to see a revenue increase of 4.6% for fiscal 2026, with operating margin expansion driven by lower fuel expenses and structural cost reductions [12] LATAM Airlines Group (LTM) - LATAM Airlines is benefiting from a lean cost structure and improved air travel demand, with a projected revenue increase of 10.1% and EPS increase of 17.8% for 2026 [16] - The company achieved an adjusted operating margin of 18.1% in Q3 2025, supported by a decline in jet fuel expenses [15] Conclusion - The analysis indicates that companies in consumer staples, logistics, and transportation sectors are well-positioned to leverage declining input costs to restore margins and enhance financial performance as inflation eases [19]

Group 1 - Ryerson Holding Corporation will host a conference call to discuss its third quarter 2025 financial results on October 29, 2025, at 10 a.m. Eastern Time [1] - The earnings report will be released after market close on October 28, 2025 [1] - The conference call can be accessed via dial-in numbers for U.S. & Canada and international participants, with a conference ID provided [1] Group 2 - Ryerson is a leading value-added processor and distributor of industrial metals, operating in the U.S., Canada, Mexico, and China [2] - The company was founded in 1842 and currently employs around 4,300 people across over 110 locations [2]

Investment Rating - The report maintains an Overweight (OW) rating on US stocks, Treasuries, and US Investment Grade Corporate Credit, while recommending a focus on quality assets [4][5][6]. Core Insights - The report highlights a structural shock to the global trading order due to the broad imposition of tariffs by the US, which is expected to weigh on growth but not lead to a global recession [2]. - US real GDP growth is projected to decline from 2.5% in 2024 to 1.0% in both 2025 and 2026, with global growth expected to decrease from 3.5% to 2.5% in the same period [2][9]. - The report suggests that while global growth is slowing, risk assets may perform well as markets adjust to lower growth expectations [3]. Economic Outlook - The US economy is expected to experience a step-down in growth, with inflation projected to peak in Q3 2025 [2][8]. - The report anticipates a decline in global demand due to tariffs, impacting exports and investment in the euro area and China [8]. - Japan's nominal GDP reflation remains intact, but the global slowdown is expected to affect its exports and investment [8]. Sector Recommendations - In the US, the report favors quality cyclicals, large caps, and defensives with less leverage and cheaper valuations [6]. - Key sectors recommended for Europe include defense, banks, software, telecoms, and diversified financials, while in emerging markets, the focus is on financials and domestic businesses [6]. - The report advises against cyclical exporters in Japan due to anticipated JPY appreciation [6]. Earnings Forecasts - The report provides earnings forecasts for major indices, with the S&P 500 expected to reach a price target of 6,500 by June 2026, reflecting a 9% year-over-year increase [7]. - The MSCI Europe index is projected to have a modest growth of 2.2% year-over-year, while the MSCI Emerging Markets index is expected to grow by 10% [7]. Monetary Policy Expectations - The report expects the Federal Reserve to cut rates by 175 basis points in 2026, with Treasury yields projected to reach 4.00% by the end of 2025 [14][19]. - The European Central Bank and Bank of England are also expected to implement rate cuts, with the ECB delivering 75 basis points and the BoE 100 basis points by year-end [14][19]. Commodity Insights - Oil prices are subject to geopolitical uncertainties, with potential scenarios ranging from minimal disruption to significant price increases depending on developments in the Middle East [16]. - European gas prices are expected to rise due to a strong demand for LNG imports to meet storage targets [17]. - Gold is highlighted as a top pick due to strong central bank demand and safe-haven interest amid growth concerns [17].