Daily Research Updates
Morning Briefings
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Two Different Worlds
(1) A sad country song. (2) The world is flat and bipolar. (3) The wealth of nations vs. the theft of nations. (4) Special interest groups and corruption. (5) Corporate profits are in a different world. (6) Still overweighting SMidCap Energy, and now LargeCap ones again too. (7) Arab Spring and Iranian Fall. (8) Boris and Natasha in the Middle East. (9) Bob Baer was just kibitzing. (10) Old World vs. New World Oil demand. (11) Focusing on Energy industry.
Civil War
(1) Montagues and Capulets. (2) Egan-Jones and YRI downgrade US debt. (3) Americans despair over DC debt gridlock. (4) The math of balancing the budget. (5) Social Security accounting for dummies. (6) Nice rally. Now what? (7) Still underweighting Financials. (8) Rescuing Greece: Now for the hard part. (9) Latest global economic indicators still soft.
Plan B
(1) “A” is for Austerity. (2) Leftist critics call on British coalition for a Plan B. (3) The IMF’s standard plan for UK and others. (4) Devaluation was the old plan. (5) Vote of confidence in Greece. (6) What’s the plan if Greece defaults? (7) Testing the 200-day moving average. (8) Break in oil price should put brake on inflation.
Naples & the Euro-Mess
(1) From beauty to garbage and junk. (2) Italy is on review. (3) Greece is on the brink. (4) Sarkozy winks, and Merkel blinks. (5) The Vienna Initiative. (6) Garbage continues to pile up in the Euro-Mess. (7) Our oil price scenario is on steroids. (8) Is the market starting to see through soft patch? (9) Non-auto factory output up nicely in May. (10) Soft patches happen. (11) LEI sends upbeat signal in US.
Muddling Beats the Alternatives
(1) Pompeii and the realtors’ mantra. (2) Natural vs. man-made disasters. (3) Greek drama. (4) More incidents in China. (5) Fixing vs. propping up the financial system. (6) Investors are muddling along with policymakers. (7) US economic indicators are muddling. (8) Market weighting most Retailers.
China Still Growing
(1) The view from Positano. (2) A severe shortage of Churchills. (3) The Haves and Have Nots. (4) Not much of a soft patch in China. (5) China’s M2 & bank loans post solid gains again. (6) China’s electricity usage & industrial output up. (7) Temporary shortage of parts hits China’s auto output too. (8) Analysts still bullish on S&P 500 earnings, while investors continue to cut P/Es. (9) Still underweighting Financials.
“Chickie Runs”
(1) Rebel without a cause: James Dean racing towards the edge of a cliff. (2) Rebels with causes: Schäuble, Trichet, Obama, Boehner, Abdullah, and Khamenei. (3) EU leaders racing towards June 24 deadline on Greece. (4) Democrats and Republicans racing towards August 2 deadline on debt ceiling. (5) Saudis have a cause. (6) Today’s soft-patch Bears were last year’s double-dip Bears. (7) Soft patch in global exports coincides with disruptions in Japanese output and exports of parts. (8) Chinese and US imports from Japan dropped sharply recently.
Broken Banks
(1) Gershwin’s lullaby. (2) Big Daddy running out of options. (3) Banks are still challenged with lots of toxic stuff. (4) Bogus stress tests in Europe. (5) Capital deficiencies. (6) Second mortgages worsen negative equity. (7) An ugly experience to avoid. (8) The case for muddling along. (9) Waiting for clarity on Greek debt and the soft patch. (10) Descending and ascending P/Es. (11) Beige Book provides some color. (12) Continuing to market weight Information Technology.
The Fed’s Options
(1) No victory lap for QE-2.0, and no “panacea.” (2) Is Ben having second thoughts? (3) Ben’s extraordinary 2002 speech. (4) Lots of bad choices. (5) QE2.5 and more ZIRP. (6) Inflationary expectations are disinflating again. (7) The Fed's number one priority. (8) Fed still watching home prices fall. (9) Declining inflationary expectations depressing P/E.
Saudis Launch QE-3.0
(1) Lots of PMIs dipping, but not too badly. (2) Japan’s M-PMI rebounded back over 50 in May! (3) China’s NM-PMI rose in May, and so did the US index. (4) Super-PMIs were solidly in expansion mode during May, except for Japan. (5) Saudis pumping more liquidity into the global economy. (6) Defectors helping to target Qaddafi. (7) Lower oil prices would help to end soft patch. (8) What might the Fed do? (9) Industrials should outperform.
Weekend Retreat
(1) By the shores of Lake Winnipesaukee. (2) Pessimistic consensus. (3) ZIRP for an extended “extended period.” (4) QE-3.0? (5) Kicking the can. (6) Sympathizing with Goldilocks. (7) Holes in the missing parts scenario. (8) Sticking with the soft patch story. (9) Another month or two for Defensive stocks, then Cyclicals should outperform again. (10) Financials may lag all year. (11) Not much good news in May’s payroll report. (12) Auto sales drop.
Soft Patch or Deep Ditch?
(1) Stall speeds and double dips are back in fashion. (2) Missing parts will soon be found. (3) Why so much angst about manufacturing? (4) All of a sudden, ADP matters to Mr. Market. (5) A speed bump for global PMIs? (6) China is in the range. (7) Diffusion indexes are cyclical. (8) The first trading day of the month.
Supply & Demand for Bonds
(1) Bulls goring bears. (2) Lots of Corporates. (3) Demand creates supply. (4) Two alternative soft patch scenarios for bond yields. (5) Why QE doesn’t matter. (6) Cyclical vs. Defensive stocks. (7) An uptick for FSMI. (8) The Bull/Bear Ratio is correcting. (9) Soft patch started in Q1.
Three Black Swans
(1) Why are stock investors so complacent? (2) Is the soft patch getting softer? (3) When will it rain in Hunan? (4) Time for Greeks to sell the Acropolis? (5) Europeans muddling along with a second bailout for Greece? (6) Investors take comfort in profits, though margins may be nearing cyclical peaks. (7) A market for traders. (8) Several disturbing trends lurking in GDP data. (9) “Midnight in Paris” (+ +).
What About Newt?
(1) Red and blue flowers and states. (2) Bill Murray and Newt Gingrich. (3) The Gang of Six is down to five. (4) National schizophrenia. (5) A local election with national import. (6) Medicare is out of control. (7) China helping Europe to muddle along. (8) Teflon-coated stock market. (9) More soft patch stuff. (10) Earnings Month.
Messy Credits
(1) Greek drama could be a “horror story.” (2) Meet Monsieur Noyers. (3) PIIGS have few options. (4) Sheriff sales in Greece and Spain. (5) Banks amassing real estate empires of smelly homes. (6) Median existing home price down 24.1% from peak so far. (7) How much longer will Financials underperform? (8) Bond yield mirroring bank stocks price index. (9) Soft patch for stock indicators. (10) Fewer bulls. (11) Lots of happy charts in latest Earnings Month. (12) NERI at record high for Health Care!
Draco & the ECB
(1) The origin of the word “draconian.” (2) Death sentence for thieves and slavery for deadbeats. (3) Taxpayers are the innocent bystanders. (4) ECB favors Draco’s solution to the European debt crisis. (5) Stark’s stark warning. (6) No soft patch in earnings. (7) Professor Copper’s story. (8) Lowering Energy LargeCaps to market weight. Still overweighting the SMidCaps. (9) What if Muammar leaves? (10) “Too Big To Fail” (+).
Europe’s Credit Bubble
(1) Doomsday delayed again. (2) LinkedIn heightens bubble greed and fear. (3) What are fully invested bears thinking now? (4) Europe’s Credit Bubble is as big as America’s Mortgage Bubble. (5) Junk in Greece. Pain in Spain. (6) Thumbs Up: Health Care and Consumer Staples. (7) Thumbs Down: Financials, Brazil, and Euro. (8) Philly Fed index sinks in soft patch. (9) “Incendies” (+ +).
The Fed
(1) The world according to the FOMC. (2) The Soft Patch Kids. (3) Their business contacts are hiring. (4) Don’t worry about inflation: It’s transitory. (5) No debate about QE-2.0 or QE-3.0. (6) Extended period extended again. (7) Bullard’s latest spiel. (8) Kohn’s strange mea culpa. (9) Who keeps playing with the risk on/off switch? (10) Sector valuation rotation. (11) The same old housing story.
Autos Crash
(1) Shock and aftershocks to the global economy. (2) Spinning wheels in the soft patch through the summer. (3) Japanese auto output plunged 55.2% m/m in March. (4) In US and China, auto output dropped 12.5% and 16.0% in April. (5) Soft patch favors defensive stocks. (6) Cyclical stocks should rebound with global auto output. (7) What’s the matter with IT? (8) Sideways indicators. (9) Bull/Bear Ratio is correcting. (10) Muni market improving. (11) Meredith is still bearish.
Ben & Thor
(1) Ben as superhero. (2) The QE hammer. (3) The Gods of Turmoil, Weather, and Earthquakes. (4) La Niña is back. (5) The forces of deflation have not been vanquished. (6) They may be regrouping in Greece. (7) More charts of more loans. (8) Is there a link between the valuation multiple and expected inflation? (9) The China price is going up faster. (10) Watching out for inflation in rents and auto prices.
Default Risks
(1) Will the US default before Greece does? (2) 10% of federal revenues cover interest payments. (3) Medicare needs intensive care. (4) Tax revenues rebounding. (5) Will Greek debt get “reprofiled”? (6) Or is Greece the next Lehman? (7) BIS data show European banks deep in PIGS. (8) Markets continue to rotate from Go Global to Stay Home. (9) What’s wrong with the banks? (10) Retail sales and inventories data confirm soft patch scenario. (11) Retailers are no longer on sale. (12) “Thor” (-).
The Fever Breaks
(1) A healthy development. (2) Hikes in margin requirements and in supplies have speculators running for cover. (3) US oil inventories at highest since May 8, 2009, when WTI was under $59. (4) A pop in corn stockpiles expected. (5) Obama called the bottom in stocks in 2009 and the top in commodities this year. (6) Bernanke looking smart on “transitory” call. (7) Stocks rotating from Go Global to Stay Home. (8) What about Professor Copper? (9) China’s economy was hot, not sour in April. (10) Global exports still booming. (11) Continue to overweight Industrials, in general, and Transportation, in particular.
Sure Bets for Banks
(1) The secret of their success. (2) Focus and discipline, or better information? (3) Inside Job. (4) Wall Street wants to write the Volcker Rule. (5) Are Financials cheap? (6) Success breeds excess. (7) Wall Street creating lots of jobs--for lawyers. (8) A broad bull market led by MidCaps. (9) Bill Miller sees value. (10) What’s cheap? What’s not? (11) Market ignores overbought indicators and small business survey.
Bulls, Bears, & SEALs
(1) New highs for consensus earnings expectations. (2) Nine happy quarters and more ahead. (3) Aim high and shoot straight. (4) Test under fire. (5) Jack of all trades. (6) Some new good stuff. (7) Same old bad stuff. (8) Downgrade in Greece. (9) Sectarian violence in Egypt. (10) Stepping on the accelerator and the brakes in China. (11) A sour note from the German canary.