TRG | The Bottom Line – 5/17

The Oculus, located in lower Manhattan, represents the city’s rebirth after 9/11. On one side of this airy structure sits the ancient St. Paul Chapel (essentially unscathed from the 9/11 attacks) and on the other the towering, glimmering Freedom Tower. The Oculus was reportedly one of the most costly railway stations in the world, which was distinctly very crowded for our visit this week in NYC. This was a big week for investor conferences in NYC as Q1 earnings season wrapped up, and the week was also highlighted by the Dow Jones Industrial Average crossing 40K for the first time. Market optimism was bolstered by an easing in the CPI, in addition to a few remaining earnings releases this week, including Home Depot (HD). HD painted a relatively optimistic outlook despite lousy weather hampering a slower start to the year. As HD CEO noted, "While the quarter was impacted by a delayed start to spring and continued softness in certain larger discretionary projects, we feel great about our store readiness, our product assortment in stores and online and our associate engagement." It does not appear that projects are getting cancelled but rather delayed, according to the company. “The home improvement customer is extremely healthy from a financial perspective…it’s not the case of not having the ability to spend. What they tell us is they’re just simply deferring these projects as given higher rates, it just doesn’t seem the right moment to execute.” TRG industry contacts continue to point to solid backlog build and visibility in 2024, despite gloomy headlines. 2024 continues to be highlighted by pretty solid earnings reports (and visibility) despite a proclivity towards a negative sentiment.