TRG | The Bottom Line – 9/11

This week's macro data reinforced a shifting narrative: August CPI ran hot at 3.4%, oil pushed back above $100 for the first time since July, and mortgage rates climbed back over 7%. Together, these are pushing Fed expectations toward 1-2 more hikes this year. Stocks sold off Thursday as the market repriced, with several of our names caught in the macro drawdown. The path forward is as bifurcated as the non-res story itself, as large capital projects continue to hold up on lower rate sensitivity while light commercial stays stuck, and outside of data-center exposure, beta is turning negative. We continue to favor alpha driven names with company-specific stories that can decouple from the broader market. We'll be watching next week's FOMC decision closely for confirmation of this bifurcation, and will flag any names in our coverage where the setup is shifting as a result.

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