Morning Briefing

Yardeni Research’s flagship offering.

A daily deep dive into the market news, movement, and indicators.

Materials, Earnings & Nvidia’s AI

Executive Summary: Looking at the S&P 500’s ytd performance by sector can be deceptive. You’d never guess that one underperforming sector, Materials, is home to three industries among the S&P 500’s top performing. Also not apparent is the breadth

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Another Happy-Go-Lucky Earnings Season 

Executive Summary: When there’s no recession on the horizon, earnings reporting seasons invariably pleasantly surprise as actual results top analysts’ consensus expectations. This earnings season is no exception. Today, we look at the impacts that S&P 500 companies’ December-quarter

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Is The Global Economy In A Recession?

Executive Summary: A few major economies of the world are in recessions currently, but the global economy as a whole is not—thanks mostly to the strong US economy holding it aloft. China is in a recession for reasons we’ve

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The Roaring 1990s: Déjà Vu All Over Again? 

Executive Summary: Many of this decade’s economic and financial market trends bear a striking resemblance to those of the 1990s. That was a decade in which a stock market meltup preceded a meltdown (in the early 2000s), so monitoring

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Consumers, Tech Infusions & AI

Executive Summary: With good incomes and debt that isn’t growing faster than incomes, consumers have been spending apace over the past quarter, but selectively. Jackie shares insights into what they’ve been buying and passing up, gleaned from the quarterly

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AI Isn’t Intelligent

Executive Summary: The AI gold rush supports our Roaring 2020s scenario. However, while AI sounds intelligent, it isn’t. As its more credible disinformation spreads across the Internet, it’s bound to cause trouble. Fingers crossed that its creators smarten it

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Earnings Bullseye, More Bullish Targets & More On Meltups

Executive Summary: Today, we analyze the analysts, noting that they tend be influenced by stock market meltups—thus fueling the meltups—and during meltups tend to raise their long-term earnings growth rates unrealistically high. Nevertheless, we explain why we follow their

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Transports, Travel & Uber

Executive Summary: Shipping industry pricing dynamics have been disrupted by hostilities in the Red Sea and drought in the Panama Canal, with both problems requiring the rerouting of ships. Jackie examines the pricing outlook as new ships enter the

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CPI, Earnings & Mexico

Executive Summary: We don’t expect the Fed to start easing anytime soon. We base that on Powell’s recent comments, January’s CPI report—which was higher than expected but no cause for concern—and the fact that it’s not necessary to ease

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Year of the Dragon

Executive Summary: China’s stock market—and its economy—could use some of the fire power evidenced in the US stock market. The Chinese government’s efforts to prop up the economy and stock market have met with mixed results. But in the

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Why Were Economists So Wrong?

Executive Summary: High inflation rarely has been tamed without precipitating a recession. Few economic prognosticators thought it could be done. Yet the Fed has steered inflation down toward its 2.0% target while allowing the US economy to fly, avoiding

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China, Small Caps & AI

Executive Summary: China’s economic malaise has impacted the bottom lines of US-based multinational companies that do business there. Jackie sums up the effects reported and expected for the rest of the year by two such companies, Air Products &

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A Global Perspective

Executive Summary: Contrary to the signals of many an economic forecasting model and indicator last year, no hard or soft landing of the US economy materialized. The models misfired because they lack a global perspective to account for the impacts

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Productivity Is Roaring Back

Executive Summary: The pandemic distorted the economy in many ways, including derailing the productivity boom that we’d been expecting would characterize this decade—our Roaring 2020s scenario. That boom now may be back on track; productivity growth was well above

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AI, China &Energy Storage

Executive Summary: Microsoft’s recent quarterly earnings call was a testament to the power of AI—its power to boost productivity dramatically in a host of business functions and its power to boost Microsoft’s revenues. … Also: China’s property market crisis

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All About Earnings

Executive Summary: More record highs for S&P 500 companies’ revenues and earnings are projected for this year, by industry analysts and us. The estimates suggest a profit margin approaching 13%. Applying a prospective P/E of 20 to our earnings

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The Wild Bunch

Executive Summary: Fed Chair Powell has managed to subdue inflation without triggering a recession but isn’t out of the woods yet. While we await Wednesday to see what he does and says next, we examine past decades’ scenarios that

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Fairy Tales Can Come True

Executive Summary: It doesn’t take a recession to bring down inflation to the Fed’s target! “Immaculate disinflation,” widely dismissed as a fairy tale, has come true. In fact, the current economic picture is enchanting, with GDP growth remaining robust,

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Defense, Semis & Solar

Executive Summary: Demand for military goods is up, but that only benefits contractors if they can keep costs in check and produce defect-free goods. A look at earnings from RTX, Textron and others. … The semiconductor industry’s shares have

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China, Europe & Earnings

Executive Summary: Is China really growing as fast as official data show? A debt crisis seems to be underway. … Beijing Put? The stock market is so bad in China that rumors are spreading that the government will intervene.

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Does Valuation Matter?

Executive Summary: The bull market started to broaden from early November through early January, but narrowed last week, probably on profit taking. No one seems to be cashing in their chips for the MegaCap-8. … A tech-led meltup could

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Let’s Party Like It’s 1999!

Executive Summary: Now that investors’ recession fears have abated, they’re focusing on company fundamentals again, so good corporate news is having a stronger bullish impact. Additionally, investors are excited about the potential of AI and the prospect of Fed

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Shipping, Steel & Solar

Executive Summary: With traffic through both the Panama and Suez canals disrupted for different reasons, shippers are shouldering higher costs to go the slow way around the tips of South America and Africa. Impacts could include supply-chain delays, inventory

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Seas Of Troubles

Executive Summary: With the world awash in geopolitical strife, we’re monitoring commodity markets for signs of both inflationary shocks and a weakening global economy. … History suggests the US economic expansion may last until mid-2026. We’re watching for developments

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Powell’s Inflation Nightmare

Executive Summary: The runaway inflation of the 1970s was whipped only after Paul Volcker took over as Fed chief, doing the deed but not without precipitating a recession. Powell’s efforts to engineer “immaculate disinflation,” lowering inflation without a recession,

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Banks, Drugs & CES

Executive Summary: Bank stocks have been rallying, with investors shrugging off concerns about commercial real estate loans and net interest margin pressures even as bank analysts cut 2024 revenue and earnings estimates. Will big banks’ Q4 earnings reports Friday change

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Here Comes Another Earnings Season

Executive Summary: Now’s a good time to review how Q4 earnings reports may affect the forward earnings that investors focus on. While Q4 results don’t go into the forward earnings calculation, what managements report on Q4 conference calls can

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Looking Forward

Executive Summary: We continue to forecast real GDP growth of 2.5% this year, but improved productivity growth could boost that to 3.0% as well as help keep inflation in check. In fact, we see a revival of productivity growth

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The True Story About Long & Variable Lags 

Executive Summary:  The point between Fed tightening and easing is a good time to reconsider the widely accepted long-and-variable-lags theory of monetary policy. Is the economy still vulnerable to recession from the lagged effects of the 2022-2023 tightening round?

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