@v587d/capital-generation 2.7.12 → 2.8.1

package/selected-skills/InvestSkill/plugins/us-stock-analysis/skills/risk-stress-test/references/11-phase-4-correlation-spike.md

@@ -0,0 +1,116 @@
+# 2. Framework(continued)
+
+Part 2 of 3 for `risk-stress-test` — 2. Framework; 3. Output Format; Example
+See `SKILL.md` for what to read and when; this part is procedure, not routing.
+
+### Phase 4 — Correlation spike: the diversification you think you have
+
+Diversification is measured on calm days and disappears on the days it is needed. Compute portfolio σ twice:
+
+```
+σ_p²  = Σ_i Σ_j w_i w_j σ_i σ_j ρ_ij
+
+Normal case : ρ_ij = the pasted / retrieved pairwise correlations
+              (if unavailable: 0.6 within sector · 0.35 across sectors · 0.0 vs. cash — mark "assumed")
+Crisis case : ρ_ij = 0.85 for every equity pair (0.95 within sector); bonds vs. equities 0.3
+              (2022-style: not the −0.3 the 60/40 model assumes)
+
+Diversification benefit = 1 − σ_p / Σ w_i σ_i        (report for both cases)
+```
+
+| | Portfolio σ (ann.) | 1-month VaR 99 % | Diversification benefit |
+|---|---|---|---|
+| Normal correlations | | | |
+| Crisis correlations (ρ → 0.85) | | | |
+
+The gap between the two rows is the amount of "diversification" the portfolio will lose exactly when it is needed. A portfolio whose crisis σ is more than 1.4× its normal σ is diversified in name only.
+
+### Phase 5 — Factor sensitivities
+
+Three exposures that historical beta hides. Score each **Low / Medium / High** with the weight of the portfolio that carries it and the direction of the hit:
+
+| Factor | Who gets hurt | Who benefits | Portfolio exposure | Direction of a +1 σ shock |
+|--------|---------------|--------------|--------------------|---------------------------|
+| **Rates ↑** (10Y +100 bp) | Long-duration growth (high P/S, distant cash flows), REITs, utilities, long bonds | Banks (NIM), insurers, cash | % of book in rate-sensitive names | est. % move |
+| **USD ↑** (DXY +5 %) | Multinationals with > 40 % non-US revenue, commodity producers, EM | Domestic small caps, importers | % of book with heavy foreign revenue | |
+| **Oil ↑** (WTI +25 %) | Airlines, chemicals, consumer discretionary, transports | Energy producers, oil services | % energy vs. % oil-consumers | |
+
+Use each company's segment / geographic disclosure (10-K) for revenue exposure; use the sector as a proxy only when stated.
+
+### Phase 6 — Liquidity: can it actually be sold?
+
+```
+Days to exit_i   = Shares held_i / (0.20 × ADV_i in shares)      (selling no more than 20 % of a day's volume)
+Illiquid weight  = Σ Weight_i where Days to exit_i > 5
+Portfolio exit   = the longest Days-to-exit among positions above 2 % weight
+```
+
+| Position | Shares | ADV (shares) | Days to exit @ 20 % ADV | Flag |
+|----------|--------|--------------|-------------------------|------|
+| … | | | | > 5 days ⚠️ · > 20 days 🔴 |
+
+A position that takes more than a month to exit at 20 % of ADV is a private holding with a ticker. Its drawdown in Phase 2 should be widened by an illiquidity haircut (10–25 %) and said so.
+
+### Phase 7 — Risk Budget Score (0–10)
+
+The headline number. It measures **how far inside the stated drawdown budget the portfolio sits** — not whether the holdings are attractive.
+
+| Component | Weight | 10 looks like | 0 looks like |
+|-----------|--------|---------------|--------------|
+| Worst historical scenario vs. budget | 35 % | Worst replay ≤ 60 % of the budget | Worst replay > 150 % of the budget |
+| 1-month CVaR 99 % vs. budget | 20 % | CVaR ≤ 40 % of the budget | CVaR > budget |
+| Correlation-spike resilience | 15 % | Crisis σ ≤ 1.2× normal σ | Crisis σ > 1.6× normal σ |
+| Concentration (top-3 weight, sector max) | 15 % | Top-3 < 25 %, no sector > 30 % | Top-3 > 50 % or one sector > 50 % |
+| Liquidity | 10 % | Every position exits in ≤ 2 days | > 10 % of the book needs > 20 days |
+| Factor tilt | 5 % | No High exposure on any factor | High on two or more factors, same direction |
+
+```
+Risk Budget Score = Σ component score × weight        (each component scored 0–10, linearly between the anchors)
+```
+
+Map — the same bands as the standard Score Guide: **≥ 6.0 → risk within budget** (signal BULLISH; 8.0+ comfortably so) · **4.0–5.9 → at the edge** (NEUTRAL) · **< 4.0 → over budget** (BEARISH). If no budget was supplied, state the one you assumed and show how the score changes at the other two tolerance levels.
+
+---
+
+## 3. Output Format
+
+1. **Data & Sources** header (above) — including the source of every β / σ / ADV and which are proxies
+2. **Headline** — three lines: what the book is (β_p, largest tilts) · worst scenario in dollars vs. the budget · Risk Budget Score
+3. **Exposure map** (Phase 1 table)
+4. **Scenario replay** (Phase 2 table) with proxies marked
+5. **VaR / CVaR** table (Phase 3) with the normal-distribution caveat stated
+6. **Correlation spike** (Phase 4) — normal vs. crisis rows
+7. **Factor sensitivities** (Phase 5)
+8. **Liquidity** (Phase 6) with the longest exit named
+9. **Risk Budget Score** table (Phase 7) and the sensitivity to the budget assumed
+10. **What would bring it inside budget** — the two or three smallest changes (trim X to Y %, add Z % cash, replace A with a lower-β B) with the estimated effect on the worst scenario. Hand the *tax* cost of each to `tax-lens`; hand the *how* to `position-ladder`.
+11. **Thesis Invalidation** and the **Investment Signal block**
+
+---
+
+## Example
+
+```
+User: Stress-test this portfolio against 2008 and 2022. $400k total. NVDA 22%, AVGO 15%,
+      MSFT 15%, TSLA 12%, AMZN 10%, XOM 8%, JPM 8%, cash 10%. I can stomach a 25% drawdown.
+      [pastes 1Y betas, σ, and ADV for each]
+
+The assistant maps the book first: net β 1.28, 74% technology / consumer-tech, top-3 weight
+52%, 10% cash. Scenario replay: 2008 ≈ −52% ($−208k, mostly proxy via β — none of the tech
+names' 2008 paths are representative of today's businesses, and it says so); March 2020
+≈ −41% in five weeks; 2022 rate shock ≈ −38% ($−152k) with TSLA (−65%) and NVDA (−50%) as the
+worst positions; 2025 tariff shock flagged as the regime where AVGO / NVDA China exposure, not
+beta, sets the loss — magnitude left for the reader to confirm. Parametric 1-month VaR 99% is
+$−61k, CVaR 99% $−70k — a third of the 2022 replay, so the assistant tells the user to trust the
+replay, not the VaR. Crisis-correlation σ is 1.5× normal σ: the seven names diversify each
+other on quiet days only. Liquidity is fine (every position exits in under a day). Factor tilt:
+High on rates (long-duration growth), Medium on USD, oil roughly neutral (XOM vs. AMZN/TSLA).
+Risk Budget Score 3.4 / 10 — every historical scenario except a mild one breaches the 25%
+budget. Smallest fixes: trim TSLA 12 → 5% and NVDA 22 → 15% into cash (worst-scenario loss
+falls to ≈ −29%), or accept the tail and restate the budget at 40%. Tax cost of the trims →
+tax-lens; how to execute → position-ladder.
+```
+
+---
+
+

package/selected-skills/InvestSkill/plugins/us-stock-analysis/skills/risk-stress-test/references/12-notes.md

@@ -0,0 +1,65 @@
+# Notes
+
+Part 3 of 3 for `risk-stress-test` — Notes; Thesis Invalidation; Standard Signal Output
+See `SKILL.md` for what to read and when; this part is procedure, not routing.
+
+## Notes
+
+- **This is a report, not a trade list.** The Risk Budget Score says whether the risk fits the budget; deciding what to do about it belongs to `portfolio-review`, `position-ladder`, and the investor.
+- **Every number is only as good as the pasted inputs.** State proxies, assumed correlations, and index magnitudes as such. If more than a third of the risk inputs are proxies, the header's Confidence is LOW regardless of source quality.
+- **Scenario dates and magnitudes are approximate** orientation figures for major indices; the user confirms any that decide the verdict, especially the recent 2025 regime.
+- **Options and hedges**: if the user holds puts or inverse products, model them as a negative-β sleeve with a stated hedge ratio, and note that hedges decay and roll — a hedge's protection is for the period it covers, not forever.
+- **Rebalance the budget, not just the book.** A user who cannot stomach the worst historical scenario for their current book has two honest choices: less risk, or a bigger stated budget. Present both.
+- Run `economics-analysis` first when the question is *which* of the four regimes is nearest; run `thesis-tracker --update` after a drawdown to separate a broken thesis from ordinary volatility.
+
+## Thesis Invalidation
+
+After delivering the analysis signal, specify what would reverse it:
+
+**If signal is BULLISH (risk within budget) — the verdict breaks if:**
+- Any position drifts above the concentration anchors in Phase 7 (top-3 > 50 % or one sector > 30 %) through price appreciation alone — the book re-rates itself without a trade
+- Realized 30-day correlations between the top holdings rise above 0.7 in calm markets — the crisis case is becoming the base case
+- `economics-analysis` flags a regime shift toward the scenario that produced this book's worst replay (late-cycle → recession, or a renewed rate-hiking path for a long-duration book)
+- ADV of any position above 5 % weight halves — the liquidity assumption no longer holds
+
+**If signal is BEARISH (over budget) — the verdict breaks if:**
+- The proposed trims / cash raise are executed and the worst-scenario replay falls inside the budget (re-run to confirm the number, not the intention)
+- The user restates the drawdown budget with a written reason (horizon, income, other assets) — the score is relative to the budget, so an honest larger budget changes it
+- A hedge sleeve is added with a stated ratio and roll plan that brings the crisis-correlation σ inside the anchor
+
+**Re-run this analysis when:**
+- [ ] Quarter-end, or any rebalance
+- [ ] Any single position moves ±25 % relative to the portfolio
+- [ ] VIX closes above 30, or the 10-year yield moves ±75 bp in a quarter
+- [ ] A contribution or withdrawal larger than 10 % of portfolio value
+- [ ] The investor's horizon, income needs, or stated drawdown budget change
+
+## Standard Signal Output
+
+This skill measures **whether the portfolio's risk fits the investor's budget, not whether its holdings will rise**, so state the mapping: `Signal: BULLISH` means the measured risk is inside the stated drawdown budget with margin; `NEUTRAL` means it sits at the edge; `BEARISH` means the worst plausible scenario breaches it. `Action: BUY` here means "the current risk level is acceptable to hold" — never "buy more." `Action: SELL` means "reduce risk," not that any holding is a short. Read the direction of the individual holdings from `stock-eval` or `bear-case`, not from this block.
+
+All analysis concludes with this standardized block:
+
+```
+╔══════════════════════════════════════════════╗
+║              INVESTMENT SIGNAL               ║
+╠══════════════════════════════════════════════╣
+║ Signal:      BULLISH / NEUTRAL / BEARISH     ║
+║ Confidence:  HIGH / MEDIUM / LOW             ║
+║ Horizon:     SHORT / MEDIUM / LONG-TERM      ║
+║ Score:       X.X / 10                        ║
+╠══════════════════════════════════════════════╣
+║ Action:      BUY / HOLD / SELL               ║
+║ Conviction:  STRONG / MODERATE / WEAK        ║
+╚══════════════════════════════════════════════╝
+```
+
+Score Guide: 8.0–10.0 Strongly Bullish | 6.0–7.9 Moderately Bullish | 4.0–5.9 Neutral | 2.0–3.9 Moderately Bearish | 0.0–1.9 Strongly Bearish
+Confidence: HIGH (strong data, clear signals) | MEDIUM (mixed signals) | LOW (limited data, conflicting signals)
+Horizon: SHORT-TERM (1 week–3 months) | MEDIUM-TERM (3 months–1 year) | LONG-TERM (1+ years)
+
+**Note:** The Score above is the Risk Budget Score, mapped onto the standard scale for cross-skill comparability. It rates *how far inside the stated drawdown budget the portfolio sits* — not how attractive the holdings are. Confidence is LOW whenever more than a third of the β / σ / ADV inputs are proxies or assumed correlations were used.
+
+**Disclaimer:** Educational analysis only. Not financial advice. VaR, scenario replays, and drawdown estimates are models under stated assumptions; realized losses can and do exceed them.
+
+

package/selected-skills/InvestSkill/plugins/us-stock-analysis/skills/sector-analysis/SKILL.md

@@ -40,387 +40,17 @@ Data & Sources
 
 Analyze US market sectors and identify sector rotation opportunities based on economic cycles.
 
-## Sector Overview
+## Read the Parts
 
-Analyze the 11 S&P 500 sectors:
-1. Information Technology
-2. Healthcare
-3. Financials
-4. Consumer Discretionary
-5. Communication Services
-6. Industrials
-7. Consumer Staples
-8. Energy
-9. Utilities
-10. Real Estate
-11. Materials
+Everything below the surface of this file lives in `references/`. **whole, with no line window** — quoting a rule or a template out of a slice of one is how a
+file gets reported as read when it was only skimmed. The file names below are the only
+addressing this entry has.
 
-## Analysis Framework
+- `references/10-sector-overview.md` — Sector Overview; Analysis Framework; Sector Rotation Strategy; Top Holdings Analysis; Sector Valuation Comparison Table; Sector Seasonality Calendar
+- `references/11-sector-correlation-matrix.md` — Sector Correlation Matrix; Sector Momentum Scoring
+- `references/12-peer-benchmarking-within-sector.md` — Peer Benchmarking Within Sector; Sector-Specific Risk Factors
+- `references/13-consumer-staples.md` — (continued) Sector-Specific Risk Factors; Sector ETF Reference; Output; Standard Signal Output; Thesis Invalidation
 
-1. **Sector Performance**
-   - Relative performance vs. S&P 500
-   - Historical performance trends
-   - Momentum and trend strength
-   - Volatility analysis
-
-2. **Economic Cycle Positioning**
-   - Early cycle: Financials, Technology, Industrials
-   - Mid cycle: Industrials, Materials, Energy
-   - Late cycle: Energy, Consumer Staples, Healthcare
-   - Recession: Utilities, Consumer Staples, Healthcare
-
-3. **Fundamental Metrics**
-   - Sector valuation (P/E, P/B vs. historical)
-   - Earnings growth forecasts
-   - Profit margin trends
-   - Revenue growth outlook
-
-4. **Macro Drivers**
-   - Interest rate sensitivity
-   - Commodity price exposure
-   - Economic growth correlation
-   - Currency impact
-   - Regulatory environment
-
-5. **Technical Picture**
-   - Sector ETF chart patterns
-   - Relative strength analysis
-   - Support/resistance levels
-   - Volume trends
-
-## Sector Rotation Strategy
-
-- Identify current economic cycle phase
-- Determine leading and lagging sectors
-- Assess rotation timing signals
-- Evaluate defensive vs. cyclical positioning
-- Consider factor tilts (value, growth, quality)
-
-## Top Holdings Analysis
-
-- Identify sector leaders and laggards
-- Analyze top 5-10 stocks per sector
-- Evaluate sector concentration risks
-- Find emerging opportunities
-
----
-
-## Sector Valuation Comparison Table
-
-Use these ranges as historical context benchmarks. Always verify current figures against live data sources. Ranges reflect long-run averages across full market cycles; individual readings may deviate significantly in extremes.
-
-| Sector | Typical P/E Range | Typical P/S Range | EV/EBITDA Range | Dividend Yield Range | Historical EPS Growth (10Y CAGR) |
-|---|---|---|---|---|---|
-| Information Technology | 22–40x | 4–10x | 15–30x | 0.5–1.5% | 12–18% |
-| Healthcare | 16–28x | 1.5–4x | 12–20x | 1.5–2.5% | 8–12% |
-| Financials | 10–16x | 2–4x (Price/Book 1–2x) | 8–14x | 2.0–3.5% | 7–11% |
-| Consumer Discretionary | 18–35x | 0.8–2.5x | 10–20x | 0.5–1.5% | 10–15% |
-| Communication Services | 15–28x | 2–5x | 10–18x | 0.5–2.0% | 6–12% |
-| Industrials | 16–25x | 1–2.5x | 10–16x | 1.5–2.5% | 7–11% |
-| Consumer Staples | 18–26x | 0.8–2x | 12–17x | 2.5–4.0% | 5–8% |
-| Energy | 8–18x (volatile) | 0.5–1.5x | 5–12x | 3.0–5.5% | 3–8% (commodity-driven) |
-| Utilities | 14–22x | 1.5–3x | 10–15x | 3.0–5.0% | 3–6% |
-| Real Estate (REITs) | 30–60x (use P/FFO: 14–22x) | 5–12x | 15–25x | 3.5–6.0% | 4–8% |
-| Materials | 12–22x | 0.8–2x | 8–14x | 2.0–3.5% | 5–10% |
-
-**Notes:**
-- P/E for Energy and Financials is highly cyclical — use normalized or through-cycle P/E.
-- REITs are best valued on Price/FFO (Funds From Operations) or EV/EBITDA, not standard P/E.
-- Dividend yield ranges shift with interest rate regimes; compare to prevailing 10Y Treasury for context.
-- P/S is most useful for early-stage growth sectors (Tech, Comm Services) where margins are expanding.
-
----
-
-## Sector Seasonality Calendar
-
-Historical seasonal patterns based on decades of S&P 500 sector returns. These are tendencies, not guarantees — confirm with current macro backdrop and momentum before acting.
-
-| Month | Historically Strong Sectors | Historically Weak Sectors | Key Seasonal Driver |
-|---|---|---|---|
-| January | Financials, Small Caps, Industrials | Utilities, Consumer Staples | "January Effect," new year portfolio repositioning |
-| February | Healthcare, Technology | Energy, Materials | Earnings season (Q4 reports), defensive rotation |
-| March | Energy, Industrials, Materials | Real Estate, Utilities | Spring economic activity pickup, rate expectations reset |
-| April | Consumer Discretionary, Technology | Energy | Strong earnings season (Q1), consumer spending uplift |
-| May | Consumer Staples, Healthcare, Utilities | Industrials, Materials | "Sell in May" defensive rotation begins |
-| June | Energy (early summer driving demand) | Consumer Discretionary, Financials | Fed meeting seasonality, summer slowdown |
-| July | Technology, Consumer Discretionary | Energy | Q2 earnings beats, summer consumer activity |
-| August | Consumer Staples, Utilities | Technology, Industrials | Thin liquidity, risk-off tendency, vacation season |
-| September | Energy | Technology, Consumer Discretionary | Historically worst month for equities overall |
-| October | Financials, Industrials, Technology | Real Estate | Q3 earnings season begins, year-end setup |
-| November | Consumer Discretionary, Technology, Industrials | Utilities, Energy | Pre-holiday retail strength, "Santa rally" setup |
-| December | Consumer Discretionary, Consumer Staples | Financials | Holiday spending, tax-loss harvesting, year-end flows |
-
-**Cycle-Overlay Seasonality:**
-- Recession entry: Utilities, Consumer Staples, Healthcare outperform regardless of month.
-- Early recovery: Financials, Technology, and Consumer Discretionary lead — often most pronounced in Q1/Q2 post-trough.
-- Commodity supercycles: Energy and Materials seasonal patterns amplify vs. normal years.
-
----
-
-## Sector Correlation Matrix
-
-Use this matrix to understand diversification benefits and macro sensitivity when constructing multi-sector portfolios. Correlations are approximate long-run averages; they compress toward 1.0 during market stress.
-
-### Inter-Sector Correlation (approximate, long-run)
-
-| | Tech | Health | Fin | Disc | Comm | Ind | Staples | Energy | Util | RE | Mats |
-|---|---|---|---|---|---|---|---|---|---|---|---|
-| **Tech** | — | Low+ | Low+ | Med+ | Med+ | Low+ | Low- | Low- | Low- | Low- | Low- |
-| **Healthcare** | Low+ | — | Low- | Low- | Low+ | Low- | Med+ | Low- | Med+ | Low- | Low- |
-| **Financials** | Low+ | Low- | — | Med+ | Low+ | Med+ | Low- | Low+ | Low- | Med+ | Low+ |
-| **Disc** | Med+ | Low- | Med+ | — | Med+ | Med+ | Low- | Low- | Low- | Low- | Low+ |
-| **Comm Svcs** | Med+ | Low+ | Low+ | Med+ | — | Low+ | Low+ | Low- | Low+ | Low- | Low- |
-| **Industrials** | Low+ | Low- | Med+ | Med+ | Low+ | — | Low- | Med+ | Low- | Low- | Med+ |
-| **Staples** | Low- | Med+ | Low- | Low- | Low+ | Low- | — | Low- | Med+ | Low+ | Low- |
-| **Energy** | Low- | Low- | Low+ | Low- | Low- | Med+ | Low- | — | Low- | Low- | Med+ |
-| **Utilities** | Low- | Med+ | Low- | Low- | Low+ | Low- | Med+ | Low- | — | Med+ | Low- |
-| **Real Estate** | Low- | Low- | Med+ | Low- | Low- | Low- | Low+ | Low- | Med+ | — | Low- |
-| **Materials** | Low- | Low- | Low+ | Low+ | Low- | Med+ | Low- | Med+ | Low- | Low- | — |
-
-**Key:** Med+ = moderate positive correlation (0.4–0.7) | Low+ = low positive (0.1–0.4) | Low- = low negative or near-zero (-0.2–0.1)
-
-### Sector Sensitivity to Key Macro Variables
-
-| Macro Variable | Strong Positive | Moderate Positive | Neutral | Moderate Negative | Strong Negative |
-|---|---|---|---|---|---|
-| Rising interest rates | Financials | Energy, Materials | Industrials, Tech | Consumer Disc, Comm Svcs | Utilities, Real Estate |
-| Falling interest rates | Utilities, Real Estate | Tech, Healthcare | Staples | Financials | — |
-| Rising oil/energy prices | Energy | Materials, Industrials | Healthcare | Consumer Disc, Staples | Airlines (Disc) |
-| Falling oil prices | Consumer Disc, Airlines | Staples, Tech | Financials | Energy | Materials |
-| USD strengthening | Domestic Staples, Utilities | Financials | Healthcare | Tech (exports), Industrials | Materials, Energy |
-| USD weakening | Tech (multinationals), Materials | Energy, Industrials | Healthcare | Domestic Utilities | — |
-| GDP acceleration | Industrials, Materials, Energy | Tech, Financials, Disc | Comm Svcs | — | Utilities, Staples |
-| Recession / GDP contraction | Utilities, Staples, Healthcare | — | Comm Svcs | Financials, Industrials | Energy, Materials, Disc |
-| Inflation rising | Energy, Materials | Real Estate | Industrials | Tech (multiple compression) | Utilities, Staples |
-| Inflation falling | Utilities, Real Estate, Tech | Healthcare, Disc | Financials | Energy | Materials |
-| Credit spread widening | Utilities, Staples, Healthcare | — | Tech | Financials, Real Estate | Disc, Industrials |
-
----
-
-## Sector Momentum Scoring
-
-Rank all 11 sectors on a 1–11 scale (1 = strongest, 11 = weakest) across four dimensions, then produce a composite rank. Update this scoring monthly or after significant macro events.
-
-### Scoring Dimensions
-
-| Dimension | How to Score | Data Source |
-|---|---|---|
-| **3M Price Return** | Rank sectors by 3-month total return vs. each other | Bloomberg, ETF returns (XLK, XLV, etc.) |
-| **Earnings Revision Trend** | % of analysts raising forward EPS estimates (breadth) | FactSet, Bloomberg consensus |
-| **Forward P/E vs. 10Y Historical Average** | Discount = high score; premium = low score | FactSet, LSEG |
-| **Analyst Sentiment** | Net buy ratings minus sell ratings as % of total | Bloomberg, Refinitiv |
-
-### Momentum Scorecard Template
-
-```
-Sector                  3M Return  EPS Revisions  Fwd P/E vs Hist  Analyst Sent.  Composite Rank
-Information Technology  [1-11]     [1-11]         [1-11]           [1-11]         [avg rank]
-Healthcare              [1-11]     [1-11]         [1-11]           [1-11]         [avg rank]
-Financials              [1-11]     [1-11]         [1-11]           [1-11]         [avg rank]
-Consumer Discretionary  [1-11]     [1-11]         [1-11]           [1-11]         [avg rank]
-Communication Services  [1-11]     [1-11]         [1-11]           [1-11]         [avg rank]
-Industrials             [1-11]     [1-11]         [1-11]           [1-11]         [avg rank]
-Consumer Staples        [1-11]     [1-11]         [1-11]           [1-11]         [avg rank]
-Energy                  [1-11]     [1-11]         [1-11]           [1-11]         [avg rank]
-Utilities               [1-11]     [1-11]         [1-11]           [1-11]         [avg rank]
-Real Estate             [1-11]     [1-11]         [1-11]           [1-11]         [avg rank]
-Materials               [1-11]     [1-11]         [1-11]           [1-11]         [avg rank]
-```
-
-### Composite Rank Interpretation
-
-| Composite Rank | Action |
-|---|---|
-| 1–3 | Strong overweight — broad-based positive momentum |
-| 4–5 | Moderate overweight — mostly positive signals |
-| 6–7 | Neutral weight — mixed signals |
-| 8–9 | Underweight — mostly negative signals |
-| 10–11 | Avoid / underweight significantly — broad deterioration |
-
-**Weighting Suggestion:** Equal-weight all four dimensions as a starting point. Tilt to 40% price return + 30% EPS revisions + 20% valuation + 10% sentiment for a momentum-focused strategy.
-
----
-
-## Peer Benchmarking Within Sector
-
-When analyzing a specific stock, compare it against its sector median to identify relative attractiveness. Use this template for every individual stock recommendation within a sector rotation context.
-
-### Single Stock vs. Sector Median Template
-
-```
-Stock: [TICKER] — [Company Name]
-Sector: [GICS Sector]
-Comparison Date: [Date] | Source: [FactSet / Bloomberg / Company Filings]
-
-DIMENSION              STOCK VALUE    SECTOR MEDIAN    PREMIUM / DISCOUNT    SCORE (1-5)
-─────────────────────────────────────────────────────────────────────────────────────────
-VALUATION
-  Forward P/E          [x.x]x         [x.x]x           [+/- x%]              [1-5]
-  EV/EBITDA            [x.x]x         [x.x]x           [+/- x%]              [1-5]
-  Price/Sales          [x.x]x         [x.x]x           [+/- x%]              [1-5]
-  Price/Book           [x.x]x         [x.x]x           [+/- x%]              [1-5]
-  Dividend Yield       [x.x]%         [x.x]%           [+/- x bps]           [1-5]
-
-GROWTH
-  Revenue Growth (TTM) [x.x]%         [x.x]%           [+/- x%]              [1-5]
-  EPS Growth (FY est.) [x.x]%         [x.x]%           [+/- x%]              [1-5]
-  Revenue Growth (3Y)  [x.x]%         [x.x]%           [+/- x%]              [1-5]
-
-MARGINS & QUALITY
-  Gross Margin         [x.x]%         [x.x]%           [+/- x bps]           [1-5]
-  EBITDA Margin        [x.x]%         [x.x]%           [+/- x bps]           [1-5]
-  Net Margin           [x.x]%         [x.x]%           [+/- x bps]           [1-5]
-  ROIC                 [x.x]%         [x.x]%           [+/- x bps]           [1-5]
-  ROE                  [x.x]%         [x.x]%           [+/- x bps]           [1-5]
-  Debt/EBITDA          [x.x]x         [x.x]x           [+/- x%]              [1-5]
-  FCF Yield            [x.x]%         [x.x]%           [+/- x bps]           [1-5]
-─────────────────────────────────────────────────────────────────────────────────────────
-COMPOSITE QUALITY SCORE                                                       [avg/5]
-```
-
-### Quality Score Interpretation
-
-| Score | Interpretation |
-|---|---|
-| 4.5–5.0 | Sector leader — significant premium justified |
-| 3.5–4.4 | Above-sector-average quality — moderate premium justified |
-| 2.5–3.4 | In-line with sector — valuation should be at-market |
-| 1.5–2.4 | Below-sector quality — discount warranted |
-| 1.0–1.4 | Sector laggard — avoid unless deep value thesis exists |
-
-**Scoring Convention:** For valuation metrics, cheaper = higher score (a stock trading at a discount to peers on P/E scores 5, a premium scores 1). For growth, margins, and quality metrics, higher is better.
-
----
-
-## Sector-Specific Risk Factors
-
-Each sector carries idiosyncratic risks beyond broad market beta. Always assess these in the context of the current macro and regulatory environment before establishing a position.
-
-### Information Technology
-- **Regulatory / Antitrust Risk:** Large-cap platforms (search, social, cloud) face ongoing EU Digital Markets Act enforcement, DOJ antitrust cases, and potential structural remedies. Headline risk can compress multiples even without earnings impact.
-- **AI Disruption / Obsolescence Risk:** Generative AI rapidly changes competitive positioning — incumbents may be disrupted faster than traditional product cycles. Evaluate whether a company is a beneficiary or a target.
-- **Semiconductor Supply Chain & Export Controls:** TSMC concentration, US-China export restrictions on advanced chips (EAR controls), and geopolitical risk in Taiwan can cause severe supply shocks.
-
-### Healthcare
-- **FDA Approval Risk / Clinical Trial Binary Events:** Drug pipeline stocks carry binary event risk at Phase 2/3 readouts and FDA PDUFA dates; a single rejection can cause 40–70% drawdowns.
-- **Patent Cliff Risk:** Major pharmaceuticals face loss of exclusivity (LOE) on blockbuster drugs — revenue can fall 80%+ within 2 years of generic entry; assess pipeline coverage vs. patent expiry schedule.
-- **Drug Pricing / CMS Negotiation:** IRA Medicare drug price negotiation and political pressure on list prices compress revenue visibility for large pharma and biotech.
-
-### Financials
-- **Interest Rate Sensitivity (NIM Compression):** Banks' net interest margins expand with rate hikes but compress when rates fall or the yield curve inverts; this is the single largest driver of bank earnings variability.
-- **Credit Cycle Risk:** Loan loss provisions surge in recessions; commercial real estate (CRE) exposure is a persistent concern for regional banks. Monitor non-performing loan (NPL) ratios closely.
-- **Regulatory Capital Requirements (Basel III/IV):** Evolving capital adequacy rules (CET1 requirements, stress test results) constrain buyback capacity and ROE generation for large banks.
-
-### Consumer Discretionary
-- **Consumer Balance Sheet Health:** This sector is most exposed to rising consumer debt, declining savings rates, and credit tightening — especially for big-ticket items (autos, appliances, travel).
-- **Tariff and Import Cost Risk:** Heavy reliance on offshore manufacturing (apparel, electronics, footwear) means tariff escalation directly compresses margins before pricing power can respond.
-- **Secular Shift in Spending (Physical vs. Digital):** Traditional retail faces ongoing structural displacement from e-commerce; under-differentiated brick-and-mortar operators face secular decline.
-
-### Communication Services
-- **Streaming Profitability Inflection Risk:** Media/streaming companies face pressure to convert subscriber growth to sustained free cash flow; content cost inflation and competition from tech giants compress margins.
-- **Advertising Cyclicality:** Digital ad revenue is highly correlated with GDP growth and corporate spending budgets — falls sharply in recessions (Google, Meta ad revenue dropped 15–25% in prior downturns).
-- **Spectrum Allocation and Infrastructure Costs:** Telecom operators face large, lumpy capex cycles tied to 5G and fiber buildouts, with uncertain return timelines and regulatory pricing constraints.
-
-### Industrials
-- **Government Defense/Infrastructure Budget Dependency:** Defense contractors and infrastructure-linked industrials are highly sensitive to Congressional appropriations, sequestration risk, and multi-year contract cancellations.
-- **Supply Chain Disruption and Input Cost Inflation:** Aerospace and industrial machinery have long production cycles — shortages in specialty materials (titanium, rare earth components) or labor can cause years-long delivery delays.
-- **Labor Cost Pressure and Union Risk:** Heavily unionized manufacturing sectors (aerospace, auto, rail) face periodic strike risk and multi-year wage escalation that can compress margins durably.
-
-### Consumer Staples
-- **Private Label / Retailer Margin Squeeze:** In cost-of-living crisis periods, consumers trade down to retailer own-brand products, reducing branded CPG companies' pricing power and volume.
-- **Input Cost Volatility (Commodities, Packaging):** Agricultural commodity inputs (wheat, corn, sugar, palm oil) and energy-intensive packaging are subject to price spikes that compress gross margins with a lag.
-- **Emerging Market Currency and Political Risk:** Many staples companies derive 30–50% of revenue from EM; local currency depreciation and political instability can materially impact reported earnings.
-
-### Energy
-- **Commodity Price Cycle Risk:** Oil and gas earnings are almost entirely driven by the WTI/Brent/Henry Hub price — a 20% oil price decline can eliminate 40–60% of sector earnings in a single quarter.
-- **Energy Transition / Stranded Asset Risk:** Long-duration upstream assets (offshore fields, oil sands) carry the risk of becoming stranded as renewable penetration accelerates and carbon pricing expands.
-- **Geopolitical Supply Disruption:** OPEC+ production decisions, Middle East conflict, Russian supply constraints, and US shale production responses create persistent supply uncertainty that makes earnings forecasting highly uncertain.
-
-### Utilities
-- **Interest Rate / Bond Proxy Risk:** Utilities are priced as bond proxies — rising 10Y Treasury yields directly compress valuations as yield-seeking capital rotates to risk-free alternatives; every 100bps rate rise compresses sector P/E by 1–2 turns historically.
-- **Regulatory Rate Case Risk:** Utility earnings are set by state/federal regulators through rate cases; adverse rulings can cap ROE and delay capital recovery for large infrastructure investments.
-- **Renewable Build-Out Execution Risk:** Ambitious clean energy transition capex (solar, wind, grid modernization) carries construction delay risk, cost overruns, and financing risk in a volatile rate environment.
-
-### Real Estate (REITs)
-- **Interest Rate Sensitivity and Refinancing Risk:** REITs use significant leverage; rising rates increase interest expense and cap rate expansion reduces property valuations. Floating-rate debt exposure is a critical variable.
-- **Property-Type Secular Trends:** Office REITs face structural demand destruction from hybrid work; retail REITs face e-commerce headwinds. Not all REIT sub-sectors face the same structural forces.
-- **Credit Market Access:** REITs must access capital markets regularly to fund growth; credit spread widening and bank lending tightness during stress periods can trap overleveraged operators.
-
-### Materials
-- **Commodity Price Volatility:** Earnings are almost entirely driven by copper, aluminum, gold, steel, or chemical feedstock prices — these are globally set and subject to large cyclical swings.
-- **China Demand Dependency:** China accounts for 50–60% of global demand for base metals; property sector weakness, infrastructure slowdown, or trade tensions in China have outsized effects on global Materials earnings.
-- **Environmental Regulation and Mine Permitting:** Mining and chemical companies face increasingly stringent environmental standards, permitting delays (often 5–10 years for new mines), and carbon pricing that raises operating costs durably.
-
----
-
-## Sector ETF Reference
-
-| Sector | SPDR ETF | Alternative |
-|---|---|---|
-| Information Technology | XLK | VGT, QQQ |
-| Healthcare | XLV | VHT |
-| Financials | XLF | VFH |
-| Consumer Discretionary | XLY | VCR |
-| Communication Services | XLC | VOX |
-| Industrials | XLI | VIS |
-| Consumer Staples | XLP | VDC |
-| Energy | XLE | VDE |
-| Utilities | XLU | VPU |
-| Real Estate | XLRE | VNQ |
-| Materials | XLB | VAW |
-
-## Output
-
-Provide sector analysis with:
-- Current sector rankings and momentum
-- Economic cycle assessment
-- Sector rotation recommendations
-- Top stock picks within favored sectors
-- Sectors to underweight/avoid
-- Risk considerations by sector
-- Expected catalysts and timeframes
-- Implementation strategy (ETFs vs. individual stocks)
-
-Keep recommendations aligned with macro outlook and risk management principles.
-
-## Standard Signal Output
-
-All analysis concludes with this standardized block:
-
-```
-## Thesis Invalidation
-
-After delivering the analysis signal, specify what would reverse it:
-
-**If signal is BULLISH — thesis breaks if:**
-- sector underperforms S&P 500 by >10% over 3 months AND rate regime turns unfavorable
-- [One or two more triggers drawn from this analysis's own drivers, each with a threshold]
-
-**If signal is BEARISH — thesis breaks if:**
-- sector rotates into leadership AND sector P/E discount to S&P closes
-- [One or two more triggers drawn from this analysis's own drivers, each with a threshold]
-
-**Re-run this analysis when:**
-- [ ] Next earnings release
-- [ ] Price moves ±15% from current level
-- [ ] 60 days have elapsed
-- [ ] Material news event (acquisition, leadership change, regulatory decision)
-
-╔══════════════════════════════════════════════╗
-║              INVESTMENT SIGNAL               ║
-╠══════════════════════════════════════════════╣
-║ Signal:      BULLISH / NEUTRAL / BEARISH     ║
-║ Confidence:  HIGH / MEDIUM / LOW             ║
-║ Horizon:     SHORT / MEDIUM / LONG-TERM      ║
-║ Score:       X.X / 10                        ║
-╠══════════════════════════════════════════════╣
-║ Action:      BUY / HOLD / SELL               ║
-║ Conviction:  STRONG / MODERATE / WEAK        ║
-╚══════════════════════════════════════════════╝
-```
-
-**Score Guide**: 8.0–10.0 Strongly Bullish | 6.0–7.9 Moderately Bullish | 4.0–5.9 Neutral | 2.0–3.9 Moderately Bearish | 0.0–1.9 Strongly Bearish
-**Confidence**: HIGH (strong data, clear signals) | MEDIUM (mixed signals) | LOW (limited data, conflicting signals)
-**Horizon**: SHORT-TERM (1 week–3 months) | MEDIUM-TERM (3 months–1 year) | LONG-TERM (1+ years)
-
-**Disclaimer:** Educational analysis only. Not financial advice.
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