Daily Research Updates
Morning Briefings
Expert market analysis delivered every morning. Stay informed with comprehensive research and data-driven insights.
Yelling for Yellen
(1) Is anxiety a prerequisite for relief? (2) More anxious moments ahead for the latest relief rally? (3) If FOMC lowers jobless threshold, there’ll be more upside for stocks and bonds. (4) Yellen speeches tend to charge up the bull. (5) The wings of a dove. (6) Yellen wants to see more “prudent risk-taking.” (7) Lookout! Fed is on the lookout for bubbles. (8) Thanks, Fairy Godmother! (9) How will we know if it’s irrational exuberance? (10) Forward earnings still moving forward to new highs. (11) Focus on overweight-rated IT.
Cover Curse
(1) Which team are you on? (2) Cover bull. (3) Ideal scenario for stocks. (4) Fall in the fall? (5) Q3 earnings season could be challenging for financial and global companies. (6) Another soft patch ahead. (7) Another fiscal fistfight ahead. (8) Taper Lite and more Yellen ahead. (9) German court to rule on OMT soon. (10) Euro zone’s weak production doesn’t jibe with region’s strong M-PMI. (11) Commodity prices yet to confirm rally in EME stocks. (12) Syria deal could be a big deal if it is serious. (13) It all adds up to neither boom nor bust, which is good for stocks. (14) Focus on market-weight-rated Consumer Discretionary Retailers.
Complacency
(1) Biblical warning. (2) Beware of bullish perma-bears. (3) Is doomsaying out of fashion? (4) Fewer recession scares. (5) The beginning of a Great Rotation? (6) The bears are mostly in the correction camp. (7) China’s hard landing postponed again. (8) Government-engineered liquidity squeeze scared Chinese officials more than lenders. (9) The Great Leap Backwards.
Go Global?
(1) In and out of fashion. (2) Dividend yielders are out. (3) Retailers are pricey. (4) European shares have upside in revenues, margins, and P/Es. (5) Crises in some EMs turn into buying opportunities. (6) Some upbeat data made in China. (7) Commodity prices still flat-lining. (8) Energy and Materials likely to remain underperformers. (9) Global warming for investors. (10) Downgrading Consumer Discretionary to market weight. (11) Upgrading IT and Health Care to overweights.
2014 In 2014?
(1) Time to think about the end of next year. (2) A mini anxiety attack and mini relief rally. (3) The biggest relief may be better global growth. (4) Revenues outlook improving. (5) Analysts see upside for profit margins. (6) Raising our 2014 S&P 500 earnings estimate. (7) Now forecasting $120 in 2014 and $130 in 2015. (8) $130 x 15.5 = 2014. (9) Global leading indicators looking up for US, Japan, & Europe. Down for BRICs. (10) Good news out of China and Japan. (11) Europe’s recovery is a slow go.
G-Rated Employment
(1) An employment report for the general public. (2) No graphic content produced last month. (3) Tiny tapering likely after all the taper talk. (4) Proxy for wages and salaries up at record high. (5) Full-timers working longer hours. (6) Full-time workers' wages rising faster too. (7) Jobless rate only 0.3 ppt from 7% threshold for QE to disappear. (8) Labor force dropouts reduce unemployment rate. (9) Who is dropping out and why?
World Is Turning
(1) Flat world exports put a lid on S&P 500 revenues during H1. (2) Global PMIs suggest better growth ahead. (3) Latest US data also looking up. (4) Auto sales confirm “Second Recovery” scenario. (5) Intermodal railcar loadings and trucking index show an economy on the move. (6) PMIs looking especially good in UK, euro zone, and US. (7) Looking OK in China. (8) Not so good in India and Brazil. (9) Focus on overweight-rated S&P 500 Transportation.
Uncertainty
(1) Syria is serious concern. (2) Geopolitical jitters offset strong PMIs. (3) What will FOMC do if oil prices spike higher? (4) Forward earnings mostly stalling at record highs. (5) Uncertainty weighing on valuations. (6) Low but rising yields likely to keep a lid on P/Es. (7) US economic indicators are mixed. (8) M-PMIs show improving global manufacturing. (9) Global Net Earnings Revisions Indexes remain negative and have yet to confirm upbeat M-PMIs.
Looking Up!
(1) Postponed US attack on Syria is a relief for market. (2) So are lots of strong global economic indicators. (3) A quick tour of the World according to MSCI. (4) World earnings estimates still falling, but a hint of better times from recent revenue estimates. (5) China’s bottom-up stimulus may be working. (6) Improving UK economy starting to discredit the anti-austerians. (7) Euro zone continues to show upside surprises. (8) US exports revision confirms improving global economy. (9) Reviews are mixed for Abenomics. (10) “Closed Circuit” (-).
Large Speculators in Oil
(1) Middle East commotion pushing oil prices higher. (2) Large speculators have been hoarding crude oil futures contracts since start of Arab Spring. (3) They currently own equivalent of all US oil stocks. (4) From mini-correction to full-blown one? (5) Lots of investment advisors in correction camp, and much fewer bulls. (6) Tracking the relationship between stock and oil prices. (7) Time to overweight underweight-rated Energy?
Arab Winter
(1) Anxiety attack about US attacking Syria. (2) Geopolitical premium in oil prices rising again. (3) From spring to winter in the Middle East. (4) An Arab world war between Sunnis and Shiites. (5) Meet the Hatfields and McCoys of the Middle East. (6) A short guide to the region. (7) Bibi’s warning. (8) Why Syria matters to oil prices. (9) Putting a lid on valuation, for now. (10) Emerging markets had issues before the price of oil moved higher. (11) EM profit margins have been squeezed significantly.
A Paucity of Panic
(1) Is the bull on anti-depressants now rather than steroids? (2) Moving sideways since mid-May. (3) Nothing to fear but fear. (4) Some fearful issues to worry about. (5) US economy continues to grow at stall speed. (6) The bad and the good in earnings. (7) Another round of fiscal follies in the fall. (8) Republicans debating defund vs. delay strategies for Obamacare. (9) Greece is still in the euro zone. (10) Everyone is bullish on Europe. (11) Focus on overweight-rated Industrials.
Bubbles Popping
(1) A novel variation on QE proposed at Jackson Hole. (2) Learning by doing at the Fed. (3) A year ago, Bernanke said QE lowered bond yields by as much as they just rose on QE taper talk. (4) Banks, foreign investors, and bond funds all selling bonds. (5) QE pumped air into bond and EM bubbles. (6) Since last FOMC meeting, bond yield up 22 basis points. (7) Rising mortgage rates hit housing. (8) FOMC minutes suggest tiny tapering in September and lower threshold for jobless rate (maybe). (9) “The Butler” (+).
Health Scare
(1) Monetary dissidents in San Francisco. (2) Two FRB-SF studies raise doubts about Fed’s ultra-easy policies. (3) Fiscal and monetary policies depressing recovery by increasing uncertainty. (4) QE’s bang-perbuck is minimal. (5) Esther George is a serial dissenter. (6) Obamacare boosts part-time jobs, depresses fulltime ones, and increases uncertainty. (7) Exchanges may not be ready for prime time. (8) Lots of inexperienced navigators without much training. (9) Get ready for lots of unintended consequences. (10) Focus on market-weighted S&P 500 Health Care.
Kindness of Strangers
(1) Summer tour in America. (2) Dodging flash floods. (3) Tapering talk and the dissent debate. (4) Fed’s exit strategy getting messier. (5) Tapering taper. (6) Foreigners are tapering their holdings of US bonds. (7) Industries with lots of part-timers account for much of this year’s job gains. (8) Earnings season’s winners and losers.
Bonds Agitating Stocks
(1) Staying rational. (2) Neither melt-up nor meltdown for now. (3) Avoiding a melt-up would be good for secular bull story. (4) Has the bull been driven by QE or fundamentals? (5) Back to the old normal for bond yields. (6) From bonds to cash rather than equities. (7) Fed’s new problem is that rising yields are bad for growth. (8) Are jobless claims too good to be true? (9) Surge in part-time jobs exaggerating payroll gains. (10) What will clueless Fed do next? (11) Bullard’s baby steps. (12) Time to sell the bull market’s leaders?
Private & Public Revenues
(1) Global oil demand at record high, but growing very slowly. (2) Oil demand up in emerging economies, down in advanced ones. (3) S&P 500 revenues growing slowly too, at 3.4% y/y. (4) US business sales up 4.9% y/y at new high. (5) Oil demand edging up in Germany and France. (6) Europe’s recession may be over, but recovery likely to be weak. (7) Could it be that austerity works? (8) Fiscal discipline in US narrowing the federal budget deficit significantly. (9) Federal government redistributing $2.1 trillion of income. (10) The US housing recovery is fragile. (11) Focus on underweight-rated S&P 500 Energy.
You Asked for It
(1) William Tell’s son. (2) Hazardous, but not dangerous work. (3) Investigating three open investment strategy cases. (4) June’s leading indicators bullish for Europe. (5) So are US exports to Europe. (6) US capital spending weakness led by structures and IT. (7) The Cloud increases IT’s bang per buck. (8) US capital goods exports are strong. (9) Leading indicators bearish for BRICs. (10) Latest earnings season mostly nonevent for overall earnings. (11) However, earnings downers included Health Care, Industrials, IT, and Materials. (12) Focus on overweight-rated Retailers.
Emerging & Advanced Economies
(1) Mixed global grab bag. (2) Global economy gets a C+ from us. (3) Muddling along in the mud. (4) Not submerging, but emerging at a slower pace. (5) In China, all stimulus will be local from now on. (6) Mickey Mouse is coming to Shanghai. (7) Brazil has lost its groove. (8) Mexico is opening up. (9) India is on a rocky road. (10) Advanced economies showing better PMIs than emerging ones. (11) Less bang per yen than expected from Abenomics. (12) US is gushing oil. (13) Euro zone is on the slow road to recovery.
Summer Doldrums
(1) Tailwinds and headwinds. (2) Bernanke is reassuring. (3) Dovish Evans is ready to taper QE with the hawks. (4) Federal deficit has been tapered, leaving room for Fed to taper. (5) Lots of commotion in Washington this fall. (6) CFI sectors continue to lead the charging bull. (7) Not much happens during doldrums. (8) Latest earnings season leaves 2013 and 2014 estimates unchanged. (9) Believe them or not: Analysts see more upside for margins in all 10 S&P 500 sectors. (10) Valuations up sharply over past two years. (11) “The Attack” (+ +).
The Accelerator Effect
(1) The circle of life: GDP and profits drive capital spending, which drives GDP. (2) Hunkering down this time. (3) Lots of cash for dividends and buybacks. (4) Lots of pent-up demand for capital goods. (5) Forward earnings is bullish for Industrials. (6) A shortage of knowledgeable and experienced workers. (7) Capital goods output popping in Germany, the UK, and the US. (8) Overweight-rated Industrials are outperforming.
Sky City
(1) Can superbull leap over tall buildings? (2) Shanghai Tower this year. Sky City next year. (3) China has world-class pollution and corruption. (4) Taking the glitz out of growth. (5) China's MSCI has lots of negative earnings revisions. (6) World trade at record high, but not growing much. (7) More upbeat indicators out of Germany (orders) and UK (output). (8) US exports rise to record high. (9) US oil trade deficit narrowing as domestic output soars. (10) ATA trucking index at record high. (11) Focus on overweight-rated S&P 500 Transportation.
Second Wind
(1) No soft patch this summer. (2) Seasonal factors could be exaggerating strength. (3) Credibility of Endgame scenario has ended. (4) Resilience of economy is feeding on itself. (5) Central bankers’ forward guidance is working. (6) More green shoots. (7) A tour of world PMIs is upbeat for company revenues. (8) Another happy Earnings Tuesday. (9) There may be more upside for profit margins and revenue growth.
Spring, Summer, & Fall
(1) Old adage getting old: May is just another month. (2) Aging bull still raging. (3) Our mantra: Four more years! (4) Julys and Augusts can be big winners. (5) Blue skies for our Blue Angels. (6) Rule of 20 P/Es at 17-19. (7) September can be a big loser. (8) Lots of stuff hitting the fan in the fall. (9) Another big up day at the start of the month. (10) M-PMI confirms “Second Recovery” scenario in US. (11) Soft patch in July’s labor indicators. (12) “Blue Jasmine” (+).
From Moderate to Modest
(1) FOMC downgrades economic growth. (2) BEA does the same to GDP. (3) Slower than the muchdreaded “stall speed.” (4) Obamacare: Two part-timers for the price of one full-timer less benefits. (5) FOMC indicates inflation is too low. (6) No change to QE or forward guidance, but statement is more dovish. (7) QE certainly isn’t doing much for GDP.