Daily Research Updates
Morning Briefings
Expert market analysis delivered every morning. Stay informed with comprehensive research and data-driven insights.
The Vegas Show
(1) 2030 is only 10 years away. (2) A future full of futuristic gadgets. (3) Elon Musk on our roofs. (4) Elon Musk’s new battery. (5) Microbes as household pets. (6) A Crispr future. (7) Smart toilets. (8) 3-D plus one. (9) Musk in our brains. (10) Flying cars. (11) We will all be Jetsons. (12) What’s cheap, what’s not cheap in the S&P 500. (13) Paying up for safety.
Will Inflation Make a Comeback in 2020?
(1) Another 2%+ quarter for real GDP. (2) Good news and not-so-good news in trade. (3) Purchasing managers are upbeat in services, still depressed in manufacturing. (4) No growth in factory orders. (5) Truck and rail traffic are on the weak side. (6) Auto sales are cruising at the same speed. (7) Employment indicators still showing a strong labor market. (8) Big issue in 2020: Will rising wage inflation boost price inflation? (9) More wage inflation in services than in goods industries. (10) Competitive pressures should keep a lid on price inflation and stimulate productivity.
More Happy Dividend Returns in 2020?
(1) Is the market high on a sugar high provided by the central banks? (2) Investors should not be preachers. (3) The problem with P/E-led meltups. (4) The Fed’s balance sheet is expanding again. (5) The ECB’s balance sheet is expanding again. (6) The BOJ’s balance sheet never stopped expanding. (7) The PBOC has cut reserve requirements 7 times since early 2018. (8) Dividends growing solidly despite earnings growth recession. (9) Dividends’ CAGR trend is around 6% still. (10) Latest bull market in S&P 500 hugging 2% dividend yield valuation model. (11) Compounding dividends are the 8th Wonder of the World.
Nothing To Fear But Nothing To Fear (and Iran)
(1) Iran again. (2) Executive action in Baghdad. (3) The ’20s vs the ’70s. (4) Is there more upside left in stocks following the Roaring ’10s? (5) The wall of worry. (6) Less to worry about? (7) Will Iran be Panic Attack #66? (8) The meltup could be on hold depending on geopolitical developments in the Middle East. (9) The valuation question. (10) The earnings question. (11) The global growth question. (12) Global manufacturing remained depressed according to December’s M-PMIs. (13) Movie review: “Richard Jewell” (+ +).
Chips for the Holidays
(1) FedEx and Boeing are downers in an otherwise up year. (2) Tech and Nasdaq come out ahead. (3) Semi Equipment is the best-performing S&P 500 industry in 2019. (4) Semi stocks are saying the cycle’s bottom is in, and good times are ahead. (5) 5G’s rollout means more equipment, more devices, and more chips. (6) Analysts upgrading semis. (7) Offering AI services makes you cool.
2020 Vision
(1) DaVinci Code 2020. (2) Hard to see a credit crunch next year with central banks still easing. (3) Less geopolitical tumult in 2020? (4) No regime change in 2021 White House. (5) 2020 vs 2019: Tighter labor market, less trade tension. (6) Another good year for consumers, and a better one for housing industry. (7) Productivity growth likely to surprise to the upside. (8) The Fed is done for a while. (9) Risks: Round up the usual suspects and the zombies too. (10) Stock market meltup? (11) Earning the coupon on bonds. (12) Neutral on the dollar at this level.
Slicing & Dicing Pork & Profits
(1) Peace dividend likely for global economy. (2) A serious shortage of pigs in China. (3) Soaring meat prices inflating Chinese retail sales. (4) Chinese forward revenues and earnings remain subdued. (5) China MSCI is cheap and likely going higher. (6) What’s weighing on NIPA profits? (7) S corporations muddying the waters. (8) Dividend data suggest that underlying trend of profits is upward. (9) National Income shares can be misleading.
Peace in Our Time
(1) Anti-war slogan. (2) Phasing in a trade deal with China. (3) Manufacturing may be weighed down by too much capacity and aging consumers. (4) No global boom in 2020. (5) The zombie story again. (6) Commodity prices may be signaling better growth ahead. (7) Mixed bag of US economic indicators still adding up to 2% growth. (8) Germany’s auto industry dragging down European manufacturing. (9) The Year of the Pig has been bad for pigs, and Chinese consumers. (10) Real retail sales growth in China remains on downtrend. (11) Children of one-child nation facing big burden as young adults tending to their aging parents’ needs.
Pedal to the Light-Truck Metal
(1) Auto manufacturers in the slow lane, hurt by international sales and EV investments. (2) Auto retailers in the fast lane, thanks to used light-truck sales. (3) Zero trade fees help brokers battle Fin Tech upstarts. (4) Shareholders like Schwab’s recent moves. (5) Fin Tech companies pressuring asset management fees too. (6) Tesla’s solar roofs may have their day in the sun.
More Easy Money in 2020
(1) The Fed Grinch who turned the past four Fed chairs into Santas. (2) Powell pivoted from Grinch to Santa last Christmas. (3) It’s been a very long Santa Claus rally since last Christmas. (4) Is it RM or QE? Who cares? The Fed’s balance sheet is expanding again. (5) Draghi’s swan song: Another open-ended QE aimed at stimulating MMT. (6) Kuroda says lots of bonds left for the BOJ to buy. (7) Don’t fight the three major central banks. (8) Thank you, Paul Volcker!
What’s in Style?
(1) Is it SMidCap’s turn to outperform? (2) Fed’s third rate cut this year along with yield curve reversal have consequences. (3) Smaller firms’ profit margins may be getting squeezed more than larger ones by tight labor market. (4) Margins higher for large companies than small ones. (5) Growth vs Value: Another perspective. (6) Go Global isn’t rising to the occasion so far. (7) Germany hasn’t bottomed yet. (8) OECD leading indicators bottoming, but not recovering. (9) China’s exports and imports stalled at record highs. (10) Forward revenues still moving forward in many places.
Purchasing Power
(1) The Fed is hearing that the local folks are benefiting from the long expansion. (2) Jobless rate down sharply for most Americans by race, ethnicity, and education. (3) Consumers’ purchasing power continues to power ahead. (4) There’s no stagnation in real wages, which are powering ahead to record highs. (5) Trend in employment growth remains solid. (6) Record number of full-time jobs. (7) Consumers are saving a lot, especially in liquid assets rather than in stocks. (8) Low rates forcing savers to save more. (9) Households’ debt-servicing burden is at record low. (10) The income inequality naysayers are getting some pushback finally. (11) Movie review: “The Irishman” (+).
’Tis the Season for Shopping
(1) This year’s holiday season has fewer shopping days. (2) Cyber Monday saw record spending. (3) Ritholtz warns investors to beware of seasonal hype. (4) While some retailers are raking it in, shifts in shopping patterns have stranded others in the cold. (5) Two S&P 500 retail industries with fraying earnings cloaks: Department Stores and Apparel, Accessories & Luxury Goods. (6) Likewise, there are haves and have-nots in the S&P 500 Technology sector. (7) High P/Es in S&P 500 Application Software industry mean there’s little room to err.
What’s New? Not Much!
(1) Global M-PMIs: some, but not much, improvement. (2) Trump making sausage out of trade talks? (3) Emerging economies showing better M-PMIs than developed ones. (4) Latest US M-PMI a downer for S&P 500 revenues growth. (5) Is trade-related uncertainty certainly bearish for stocks? (6) The Fed is probably done for now, but a one-and-done rate cut is possible early next year. (7) Looking forward to better earnings. (8) A few bond-friendly developments.
Signs of Life & Death
(1) The Great Inflation of the 1970s is long behind us. (2) Is inflation dead or just in a coma and on life support provided by the central banks? (3) The Fed’s delusional “make-up” strategy for inflation. (4) ECB ready to fine-tune inflation target. (5) BOJ out of ammo. (6) Central bankers want fiscal policy to take over. (7) China catches the swine flu. (8) Looking for a pulse in the global economy. (9) China’s lukewarm stir-fry. (10) German auto industry reducing payrolls. (11) US consumers on spending spree that has yet to trickle down to manufacturing.
What’s the Matter with Profits, Again?
(1) Oddities in profits data. (2) The bears love NIPA profits because they are in a coma (ambiguity intended: Read either way). (3) Stock prices diverging from NIPA profits. (4) S&P 500 earnings diverging from NIPA profits. (5) Tale of two profit margins: S&P 500 at record high, while NIPA on downward trend. (6) Market discounting that earnings growth will rebound next year from this year’s growth recession. (7) Another earnings season, another earnings hook. (8) NIPA profits measure is a fruit cocktail. (9) S corporations distorting NIPA profits and National Income shares.
Some More Thanks Giving
(1) Wearing a cardigan sweater at TD dinner. (2) Raining on the parade. (3) Ready for Santa. (4) Wild ride for S&P 500 P/E since early 2018. (5) The case for a meltup. (6) More panic attacks or the big bear? (7) Trump and Xi need a face-saving phase-one deal. (8) Does Pelosi really want to impeach Trump, or just embarrass him? (9) Another government shutdown? Probably not. (10) Scientists making progress on CO2 scrubbers.
Thanksgiving
(1) Thanksgiving and Mr. Rogers. (2) Counting blessings. (3) A great year for stocks and bonds. (4) Lots of full-time jobs. (5) Real wages at record high. (6) Mixed capital spending. (7) No boom, no bust. (8) Clunkers: Exports, imports, railcar loadings, and leading indicators. (9) The Fed’s latest financial stability report. (10) Nothing to fear but lots of corporate debt. (11) Movie review: “A Beautiful Day in the Neighborhood” (+ +).
Consumers Are Consuming
(1) Europe finding a bottom? (2) European car registrations pop, and non-auto retail sales head to new highs. (3) Chinese debt hitting higher highs. (4) Chinese bond defaults strike companies, banks, and municipal entities. (5) In US, all retailers are not having the same year. (6) Target hits multiple bullseyes; Kohl’s strikes out.
Global Capital Flows & the Dollar
(1) The jury is out on Go Global vs Stay Home. (2) US came out of Great Financial Crisis better than most. (3) US financial system is strong. (4) US consumers are in very good shape. (5) High-tech capital spending booming. (6) Inverse correlation between the trade-weighted dollar (TWD) and commodity prices, which remain weak. (7) Our capital flows proxy is also inversely correlated with TWD. (8) Emerging markets tend to do best when Fed is easing. (9) Dollar remains key reserve currency. (10) Deflating Asian PPIs.
P/E Primer
(1) Question of our times: Is the market overvalued? (2) Inflation-adjusted valuation models aren’t alarming. (3) Meet MAPE: Misery-Adjusted P/E. (4) Les Misérables are much less miserable. (5) Inverse relationship between P/E and misery. (6) A primer on forward P/Es. (7) 505 P/Es. (8) S&P 500 Energy, Financials, Health Care, and Industrials are the fairest of them all. (9) Market-cap shares vs earnings shares for the sectors. (10) Global sectors: valuation vs market-cap shares.
Revisiting Earnings & Valuation
(1) The life of Brian. (2) Despite Brexit, London is booming. (3) Hillary and me. (4) No trade deal yet with China. (5) What if Chinese troops repress Hong Kong? (6) Mixed signals from stock market indicators. (7) Only 400 points to go from 3100 to 3500. (8) Doing the math again. (9) Forecasting forward earnings. (10) Growth recession in business sales. (11) Melt-up risk. (12) Valuation models factoring inflation show market isn’t overvalued, though not cheap. (13) Movie review: “Ford v Ferrari” (+).
A Couple of Consumer Discretionary Industries
(1) Two S&P Consumer Discretionary sector industries may be headed out of favor with buyers of their products and their stocks: Homebuilding and Internet Retail. (2) Consumers know value when they see it and wait for it when they don’t. (3) Consumer discretion: the better part of value? (4) Rising mortgage rates and home prices aren’t good for homebuilders. (5) Elevated valuations aren’t good for their stocks’ future performance. (6) Internet retailers’ share prices have lagged the broader market, but perhaps justifiably so given diverse woes. (7) 3-D printing makes itself at home—and work.
Zombies in the Fed’s Soup
(1) How to watch the Fed. (2) Suffering from group-think. (3) Doubling down on faulty models. (4) An embarrassing case in point: Undershooting the inflation target for 8 years. (5) A glut of demand-side macroeconomists. (6) Debt-financed demand for goods and services can be weighed down by too much debt. (7) Borrowing by zombie companies creates deflationary excess capacity. (8) Borrowing binges, now and then. (9) The Fed is feeding the zombies, postponing the IMF’s zombie apocalypse. (10) More on comparative global valuation by sectors.
Going Global
(1) Across the pond. (2) Brexit, China, Trump, etc., etc. (3) Cabin fever revisited. (4) Everyone is going global. (5) From contrary to consensus in a few weeks. (6) Third time’s the charm for the Fed. (7) A bull market in a bull market. (8) The Fed is on pause over the next 12 months. (9) Trump’s favorite poll. (10) Bad news for bonds is good news for stocks. (11) Germany’s L-shaped bottom. (12) US vs them: comparing valuation multiples by the sectors.